When you're paying off more than one debt at a time, the question isn't just how much you pay each month — it's which balance the extra money goes toward first. Two orders are the common answer, and they optimize for different things.
The avalanche method
Pay the minimum on every debt, then put every extra dollar toward whichever balance carries the highest interest rate, regardless of size. Once that one is paid off, roll its payment into the next-highest-rate balance, and so on.
This minimizes total interest paid over the life of the payoff — it's the mathematically optimal order.
The snowball method
Pay the minimum on every debt, then put every extra dollar toward whichever balance is smallest, regardless of rate. Once that one is paid off, roll its payment into the next-smallest balance.
This usually costs somewhat more in total interest than the avalanche method, but it produces a paid-off account sooner — sometimes within the first month or two — which is the whole point: a visible win early tends to keep people following the plan.
Which one to pick
- If the rate spread between your debts is small, or you're confident you'll stick with a plan either way, avalanche saves you real money for no extra effort.
- If you've started and abandoned a payoff plan before, or the size of the full debt load feels discouraging, snowball's early win is often worth the extra interest — a plan you actually finish beats a theoretically cheaper one you quit.
Either method only works if the minimum payments are covered on every account first — missing a minimum payment to accelerate another balance triggers late fees and can raise your rates, which erases the benefit of either order.
This article is educational and general in nature — it isn't personalized financial advice.