Debt Snowball vs. Debt Avalanche: Which One Actually Gets You Out of Debt Faster?
Debt Snowball vs. Debt Avalanche: Which One Actually Gets You Out of Debt Faster? Search "how to pay off debt" and you'll get two competing answers within the first few results, both presented as the obvious right choice. Neither article usually shows you the actual numbers side by side. So here they are. The Setup Say you owe money in three places: Debt Balance Interest Rate Credit Card A $1,200 24% Credit Card B $3,500 19% Personal Loan $6,000 11% You have $400/month total to put toward debt, split between minimums on everything and one extra payment target. Method 1: Debt Avalanche You pay minimums on everything, then throw all extra money at the highest interest rate debt first — Credit Card A, at 24%. Once that's gone, you roll its whole payment into Credit Card B (19%), then finally the loan (11%). This ...