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Paying Off Debt Fast. Snowball Vs. Avalanche

Snowball Vs Avalanche: Which method is better?

Snowball vs avalanche method of debt repayment. Two phrases you’ve undoubtedly heard if your debt starts to become a problem with your long-term goals, you need to start a plan of action.

Try not to feel overwhelmed. According to Ramsey Solutions “Total household debt in America is at $16.15 trillion. So, if you’re feeling the weight of credit card debt, car loans, student loans, and more, well—you aren’t alone. Debt is normal

But choosing the best way to tackle high balances on your credit reports can be a little tricky depending
on what your goals are.

You have to be realistic in your approach and take into consideration the different factors like the kind of debt, the terms of that debt, how it affects your credit reports, and what is most sensible for your budget and goals.

Let’s first dive into and compare the difference between the debt avalanche and Snowball methods and the
pros and cons.

What is the snowball method?

The snowball method is used when you want to pay off your debts slowly. Typically, you would start with the smallest balances first. Your goal is to pay off the smaller debts and then move on to the larger debts. For example, let’s say you have 5 credit cards ranging from 500 to 15,000. The snowball method would have you pay off the 500.00 balance first then move on to the next smallest balance and so forth.

Does the Snowball method work?

The premise behind the snowball vs avalanche method is to motivate you, the borrower with a series of small wins. This builds confidence and strengthens your resolve to becoming debt free. You will also notice as debts get paid off, your credit score will slowly start to increase because your debt-to-credit ratios are coming down. It is important to note that when you do pay off these credit cards, you

DO NOT want to close them unless you are positive you will not be using your credit for anything in the future. Read more about credit scores

The snowball method may not be the best method; however, it is for those borrowers that need to feel a sense of progress and need to see quicker results. It is also an easier method to get started.

The disadvantage of the snowball vs. avalanche method is that it can end up being more expensive because you are concentrating on the accounts based on balances rather than accounts with higher interest rates, which over time can add up.

What are the Pros and Cons of the snowball vs. avalanche method?


    • Builds confidence and motivation by paying off debt faster

    • Easier to get started

    • Helps with re-building your credit score


    • More interest accumulation and more costly

    • May take longer to get out of debt

What is the Avalanche Method?

The debt avalanche method is the opposite of snowball in that you will start paying only the minimum payments on all your revolving debt and use any remaining money to pay towards the debt with the highest interest rate. This method will save you the most money in the long run. When using this method it is important to stick to the plan and not get discouraged. You may not see the results as quickly compared to the snowball, but the money you save could be worth it.

Does the Avalance method work?

Yes, but everyone’s situation and psychological makeup are different. If you are like me, you are better at being slow and methodical while others may want instant gratification. So choose a method that keeps you in the game and aids in achieving your goals.

What kinds of debts work with the debt avalanche method?

There really is no limit to what you can include when using the debt avalanche method, below is a quick list:

    • Credit cards

    • Student Loans

    • Auto Loans

    • Medical Bills

    • Personal Loans

What are the Pros and Cons of the Avalanche method?


    • Paying off the debts with higher interest first saves you money and as you go the payments will start to decrease over time.

    • Paying the high-interest balances means less interest accumulation which ultimately leads to saving money.

    • Very good for borrowers that follow a budget


    • You do not see instant progress, it may take borrowers longer to pay off the balances because you are paying more toward the higher interest rate and only the minimum on the other accounts.

    • It could be difficult to start off with larger payments if your budget is tight.

Additional Considerations

Whether you are using the snowball or avalanche you need to take into consideration credit cards that have a special introductory offer.

For instance, 0% if you pay off the balance within a certain time frame. You will want to make sure that these accounts are addressed and paid off before the expiration or you have just compounded more interest.

You also want to look at the type of card you applying the method to. Is it a card that you are positive you will not use again once it is paid off?

Lastly, things can and will occur in life that could stall your progress. You should always prepare to take a breather from your repayment plan and take care of the unintended circumstance that could arise. Once you have addressed it, you can then continue where you left off.

Does the Debt snowball vs avalanche method help repair credit?

Yes, The debt avalanche method and the snowball method aid in credit repair, but not overnight.
As your balances decrease, your debt-to-credit ratios get better, and when they get better your score will increase. Keep in mind when you close good accounts, that could decrease the scores. So, if you are looking to purchase a home or a car you will want to keep the credit cards open.

Can paying off debt help me purchase a home?

Yes, of course. Paying down debt helps get your debt to income in line with purchasing a home; however, you
do not want to put too many irons in the fire. If your focus is to get out of debt, you will want to put all your energy into it. Purchasing a home is a big step and some lenders require a down payment. You may over-extend yourself by saving for a down payment and trying to get debt free at the same time leaving nothing for incidentals.

Again, be realistic and focus on one task at a time.

How to start a Budget

One of the most important personal finance tasks to complete before deciding on an approach to debt freedom is to create a budget. Some budgets will have you set aside money for things you want, for this topic we will want to set aside the things you want and allocate that money toward financial freedom.

Creating a budget helps you identify needless spending and that money can then be allocated toward your debt reduction plan.

    • List your income from all sources

    • List all expenses

    • Deduct your expenses from your transactions

    • Start all over next month

In Closing:

The snowball vs avalanche method both achieve debt freedom, you just have to choose which method best fits your personality and current financial situation. The snowball method seems to be the most motivating especially in today’s environment where you may not have that much disposable income due to the rising costs of living. Once you have become debt free you can then focus your attention on purchasing a home or saving for retirement.

Download our free snowball debt spreadsheet


Experts in all things credit and debt, My Credit Group has been working in the credit industry for more than 19 years and is considered a leading authority in the field.

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