There are two well-known ways to pay off multiple debts, and the argument between them has been running for years. Both work. They optimise for different things, and the right answer depends on something the maths cannot see.
The two methods
Debt avalanche
Pay minimums on everything, then put every spare pound toward the debt with the highest interest rate. When it clears, roll that payment into the next highest rate.
This is mathematically optimal. It always costs the least in total interest and always clears the debt in the shortest time, by definition.
Debt snowball
Pay minimums on everything, then put every spare pound toward the smallest balance, regardless of rate. When it clears, roll that payment into the next smallest.
This costs more in interest. It also produces a cleared debt much sooner, which matters more than it sounds.
A worked comparison
Say you have three debts and 300 a month above minimums:
- Card A: 800 at 22% APR
- Card B: 3,000 at 18% APR
- Loan C: 5,000 at 7% APR
Avalanche attacks Card A first anyway here, because it happens to be both the smallest and the highest rate. The methods only diverge when the small debt is not the expensive one.
Change Card A to 800 at 6% and the paths split: avalanche goes after Card B at 18%, while snowball clears the 800 first. Avalanche saves you real money in interest. Snowball gives you a completed debt in roughly three months instead of twelve.
The interest difference between the two methods is usually smaller than people expect — often a few hundred pounds across a multi-year payoff, not thousands. The completion-rate difference is often larger.
How to choose
Ask yourself one honest question: have you tried to pay off debt before and stopped?
If yes, choose the snowball. Your binding constraint is motivation, not arithmetic. A method you finish beats a cheaper one you abandon, and research on financial behaviour has generally found that visible early wins improve follow-through.
If no — you have never lost momentum and you are comfortable with spreadsheets — choose the avalanche. You will pay less and finish sooner. There is no reason to give up money you do not need to.
The hybrid most people should actually use
Clear any debt under a few hundred pounds first, whatever its rate, purely to reduce the number of accounts you are managing. Then switch to strict avalanche ordering.
You get one early win and the fewer-accounts simplification, then take the mathematically better path for the long stretch. This tends to work well for people who want the money to be optimised but know they need something to happen in the first month.
What matters more than either method
Three things outrank the ordering entirely:
- Stopping new debt. Paying down a card you are still using is running to stand still. This is the actual first step.
- A small emergency buffer. Without one, the next unexpected cost goes back on the card and resets your progress. A few hundred pounds set aside protects the whole plan.
- The amount you pay above minimums. Doubling your extra payment affects the timeline far more than choosing the perfect order. Finding an extra 100 a month beats optimising sequence.
One more option worth checking
Balance transfers and consolidation can reduce the rate on expensive debt, which changes the arithmetic considerably. They are not free and they carry real risks — fees, promotional periods that expire, and the temptation of a freshly available credit limit. Read the terms carefully, and if your situation is complex or you are struggling to keep up with minimum payments, speak to a free debt advice service in your country before committing to anything.
The Complete Money System includes a debt payoff planner that runs both methods side by side on your real numbers, so you can see the actual difference before choosing.
Lymova provides organisational tools and templates for managing your own money. We are not licensed financial advisers or debt counsellors, and this article is general information rather than personalised advice.