Why a plan beats paying "a bit extra on everything"
Spreading spare money evenly across all your debts feels fair and is almost always the worst option. Every dollar you send to a 6% car loan is a dollar not killing a 23% credit card — and that difference compounds every single month.
Both strategies here follow the same core rule: pay the minimum on everything, then concentrate all spare cash on one target until it dies. They only disagree about which target to pick first.
Avalanche vs snowball, honestly
- Avalanche — attack the highest interest rate first. Mathematically optimal, always the cheapest, usually the fastest.
- Snowball — attack the smallest balance first. Costs a bit more, but you close an account sooner and get a visible win early.
I'll be straight about my own view: I'd take avalanche, because the money is real and I like the math. But I've watched people quit perfectly optimal plans out of sheer exhaustion — and a snowball plan you finish beats an avalanche plan you abandon in month four. Toggle the buttons above and look at the actual gap for your numbers. If it's small, pick the one you'll stick to.
How the simulation works
This isn't a formula — it's a month-by-month simulation, because the rollover effect can't be captured in a single equation. Each month:
- Interest is added to every balance at its own rate
- Every debt receives its minimum payment
- All remaining money attacks the current target debt
- When a debt hits zero, its minimum joins the attack pool permanently
That last step is the engine. Clearing a $45/month store card doesn't just remove a bill — it permanently adds $45 to what you throw at the next debt. Payoffs accelerate as you go, which is why the last debts fall much faster than the first.
Before you start
- Stop adding to the pile. The plan assumes no new balances. Pause the cards while you work through this.
- Keep a small emergency buffer. Without one, the next unexpected expense goes straight back on a credit card and undoes months of progress.
- Ask for lower rates. One phone call can cut an APR; every point saved shortens the plan.
- Automate the extra payment for payday, so it leaves before you can spend it.
Working on a single card instead? The credit card payoff calculator goes deeper on one account, including what minimum payments really cost.
Frequently asked questions
What is the debt avalanche method?
You pay the minimum on every debt, then throw all spare money at the debt with the highest interest rate. When it clears, its payment rolls into the next-highest rate. This is mathematically optimal — it always costs the least total interest and usually finishes fastest.
What is the debt snowball method?
Same idea, but you target the smallest balance first regardless of rate. It costs slightly more interest, but you eliminate an entire account sooner, which gives momentum and one less bill to track. For many people that motivation is the difference between finishing and quitting.
Which method is better?
Avalanche wins on paper; snowball wins on psychology. Use this calculator to see the actual gap for your numbers. If avalanche only saves a few hundred dollars and snowball keeps you motivated, snowball may genuinely be the better choice for you.
Why does clearing one debt speed everything up?
Because that debt's minimum payment does not disappear — you redirect it to the next debt. Each payoff makes the next one faster, which is where the snowball image comes from. The calculator simulates this rollover month by month.
Should I pay off debt or invest?
Compare the interest rate against the return you could realistically expect. Paying off a 22% credit card is a guaranteed 22% return, which beats any normal investment. Low-rate debt like a 3% mortgage is a different conversation. One exception: always contribute enough to get your full employer 401(k) match first, because that is an instant 50%.