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Avalanche Method vs. Snowball Method: Paying Off Debt

Credit
02 Jul 25

If you're struggling to pay off your credit card debt, you may be wondering how to get started. There are two popular methods for paying off credit card debt: the Debt Avalanche Method and the Debt Snowball Method.

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If you're struggling to pay off your credit card debt, you may be wondering how to get started. There are two popular methods for paying off credit card debt: the Debt Avalanche Method and the Debt Snowball Method.

Both of these methods can be effective in helping you become debt-free, but they work differently. In this article, we'll explain the differences between these two methods and help you decide which one is right for you.

Comparing the two

The Debt Avalanche Method is a strategy where you focus on paying off the credit card with the highest interest rate first. Once that debt is paid off, you move on to the next highest interest rate, and so on.

The Debt Snowball Method is different, in that it has you focus on paying off the smallest balance first, regardless of the interest rate. Once that debt is paid off, you move on to the next smallest balance, and so on.

So which method is better? It depends. If you're someone who needs quick motivation to keep going, then the Debt Snowball Method may be right for you. Seeing those balances disappear quickly can give you the boost you need to stick with your plan and pay off all of your debt.

On the other hand, if you're someone who is motivated by saving money, then the Debt Avalanche Method may be a better fit. By focusing on the debt with the highest interest rate, you'll save more in interest over time.

No matter which method you choose, the important thing is to get started and stick with it.

Advantages and disadvantages of the Debt Avalanche method

The Debt Avalanche approach entails making modest payments on all of your outstanding debts, then paying off the bill with the highest interest rate using any money left over. The debt avalanche technique is most advantageous in terms of interest payments.

You may save hundreds of dollars in interest payments by following the Debt Avalanche approach and simply changing the order of your debt payoffs. The Avalanche method can also help individuals with larger amounts of debt to pay off their debts more quickly.

The Debt Avalanche technique is the most effective approach to saving money and time, but it does have certain disadvantages. It mostly requires fortitude—to put all of your spare cash toward repaying a specific debt rather than just the minimal. If you lose interest and skip a month or two of planned payments, the debt avalanche will not work as well.

The advantages are that you pay less interest over time, it cuts down on the amount of time it takes to get out of debt, and it's good for budget-conscious individuals. The drawbacks are that it requires discipline, and it may be difficult to see progress.

Advantages and disadvantages of the Debt Snowball method

The Debt Snowball method involves paying minimum payments on all your debts, but putting any extra money towards your lowest debt balance.

You should be able to get rid of your smallest debts quickly since you're putting all of your additional money towards them. This will provide you the motivation to continue paying off all of your obligations. When you pay off one balance, you put the money that was going to that bill towards the next smallest debt.

The advantage of the Debt Snowball method is that it provides quick motivation, it's simpler to see progress, and it may be better for individuals who struggle with self-control. It does have drawbacks though. You will pay more interest over time, and it may take longer to get out of debt.

Which method should you choose?

Which approach should you pick? That depends on your personality and financial circumstances.

If you're motivated by quick wins and need to see progress to stay motivated, the Debt Snowball method may be a good choice for you. But if you're someone who is motivated by saving money and want to pay off your debt as quickly and cheaply as possible, the Debt Avalanche method may be the better option.

Both methods can help you get out of debt, so the most important thing is to choose the one that you'll actually stick with. Whichever method you choose, make sure to:

  • Make minimum payments on all of your debts
  • Put any extra money towards your chosen debt
  • Stick with the plan until all debts are paid off

Getting out of debt is never easy, but with a plan and some discipline, it's definitely possible. Choose the method that works for you and get started today!

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