How it works
Each month, interest is added to every balance (rate ÷ 12), every minimum payment is made, and the extra payment goes to one target debt. When a debt is paid off, its minimum payment “rolls over” to the next target, so your total monthly payment stays constant.
- Avalanche targets the highest interest rate first — this minimizes total interest.
- Snowball targets the smallest balance first — you get quicker wins, which many people find motivating.
No new charges are assumed and minimums are held fixed.
Worked examples
Card A $2,000 @ 15% ($60 min), Card B $6,000 @ 24% ($180 min), Car $9,000 @ 7% ($250 min), $200 extra
Avalanche: 29 months, $2,686.21 interest; order Card B (month 20), Card A (month 23), Car loan (month 29).
Snowball: 29 months, $2,924.72 interest; order Card A (month 9), Card B (month 23), Car loan (month 29).
Avalanche saves $238.52.
Store card $1,200 @ 27% ($40 min), Visa $4,500 @ 19% ($110 min), $100 extra
Avalanche: 29 months, $1,492.89 interest; order Store card (month 10), Visa (month 29).
Snowball: 29 months, $1,492.89 interest; order Store card (month 10), Visa (month 29).
Both cost the same here.