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Debt snowball vs avalanche

Published August 17, 2026

The avalanche pays the highest interest rate first. The snowball pays the smallest balance first. On $1,800 at 12 percent and $6,000 at 24 percent, cleared with $500 a month, avalanche costs $1,272.10 of interest and snowball costs $1,568.47, a gap of $296.37 over the same 19 months.

	Debt avalanche	Debt snowball
What is sorted	Interest rate, highest first.	Balance, smallest first.
Teaching-sheet interest	$1,272.10 across 19 months.	$1,568.47 across the same 19 months.
The gap	Cheaper by $296.37.	The extra is what the small card costs to park in front of the 24 percent balance.
When the small card closes	Month 19, once the expensive card is gone.	Month 5. That is the snowball's whole case in one line.
Stage one payment	$482 to the $6,000 card, $18 holding the other still.	$380 to the $1,800 card, $120 holding the other still.
What both share	Minimums on every debt, leftover to one target, rolling the freed payment on.	The same budget, the same compounding, a different first target.

On this page

One difference, the rest is identical

Both methods pay the minimum on every debt. Both send everything left over to exactly one debt at a time. Both roll the freed payment into the next one. They disagree about which debt goes first.

On this sheet the budget is $500. The credit union card is $1,800 at 12 percent, month-one interest $18. The rewards card is $6,000 at 24 percent, month-one interest $120. Avalanche starts on the rewards card at $482. Snowball starts on the credit union card at $380.

Both runs clear in 19 months. The whole gap is interest: $1,272.10 against $1,568.47. Debt snowball vs avalanche is the long form, with every stage walked. This table is the pair at a glance. The debt payoff simulator is the same two orders as a picture.

What sets the size of the gap

Three things: how far apart the rates are, how large a balance the snowball parks in front of the expensive debt, and how long it sits there. Where the smallest balance also carries the highest rate the two methods agree, and with only two debts that settles it.

A fee, a promotional expiry or a deferred-interest deadline outranks the rates and decides the order instead. This table assumes none of those. How credit card payoff works is one closed card at a flat payment. This is educational material, not financial advice.

Worked examples

Where the first \$500 goes

You owe $1,800 on a card charging 12 percent and $6,000 on a card charging 24 percent, and you can put $500 a month against them. Before any ordering decision, how much of that first payment is interest?

Monthly rate on the smaller card: $0.12 / 12 = 0.01$ , so the interest it charges is $1800 \times 0.01$ .
Monthly rate on the larger card: $0.24 / 12 = 0.02$ , so the interest it charges is $6000 \times 0.02$ .
Add the two charges together to get the month's interest bill.
That bill is 27.6 percent of the $500, leaving $362 of principal.
Divide that bill by the $500 budget to see what share of the payment never touches the debt.

The two cards charge $18 and $120, so $138 of the first $500 is interest. Both figures are the same whichever card you attack first.

Avalanche stage one: the 24 percent card

Attacking the higher rate first, the $1,800 card is held still at $18 a month and the rest of the $500 budget goes to the $6,000 card at 24 percent. How long does that card take and what does it cost?

Holding the other card still takes $18, so the payment on the target is $500 - 18 = 482$ .
Monthly rate: $0.24 / 12 = 0.02$ , so month one charges $6000 \times 0.02$ .
That leaves $482 - 120 = 362$ off the balance in month one, and a little more in every month after it as the balance falls.
Repeat until the balance reaches zero, with a short final payment.

The rewards card clears in 15 months. You hand over $6,969.78 against a $6,000 balance, so the interest on it is $969.78, and month one's share of that is $120. The card with the larger balance and the higher rate is doing almost all of the damage, which is exactly why the avalanche sends the money here.

Snowball stage one: the \$1,800 card

Attacking the smaller balance first, the $6,000 card is held still at $120 a month and the rest of the $500 budget goes to the $1,800 card at 12 percent. How fast does it close?

Holding the larger card still takes $120, so the payment on the target is $500 - 120 = 380$ .
Monthly rate: $0.12 / 12 = 0.01$ , so month one charges $1800 \times 0.01$ .
That is $18 against a payment of $380, so more than 95 percent of it comes straight off the balance.
Repeat until the balance reaches zero, with a short final payment.

The card closes in month 5. You hand over $1,853.44 on a $1,800 balance, so it costs $53.44 in interest and opens with a charge of $18. This is the snowball's whole case in one line: an account gone in five months, fourteen months sooner than the avalanche closes the same card.

The snowball's interest bill in full

Add up every dollar of interest the snowball run charges: stage one on the small card, the months spent holding the large card still, and stage two on the large card. What does the whole run cost against the $7,800 borrowed?

Stage one on the $1,800 card: $53.44.
Holding the $6,000 card at interest only for five months: $120 \times 5 = 600$ .
Stage two on what was left of the large card: $915.03.
Add the three, then set the total against the $7,800 of balances you started with.

The snowball run costs $1,568.47 in interest, which is 20.1 percent of the $7,800 borrowed. The $600 in the middle is the line worth staring at: five months of payments on the expensive card that removed no debt at all, spent so that the cheap card could close early.

The avalanche's bill, and the size of the gap

Do the same for the avalanche run, then set the two totals side by side. How much does paying the higher rate first actually save?

Stage one on the $6,000 card: $969.78.
Holding the $1,800 card at interest only for fifteen months: $18 \times 15 = 270$ .
Stage two on what was left of the small card: $32.32.
Add the three, then subtract the total from the snowball's $1,568.47.

The avalanche run costs $1,272.10, which is 81 percent of the snowball's bill and leaves a saving of $296.37. Both runs clear the same $7,800 in the same 19 months.

Common questions

Which method costs less?

Avalanche, when the rates are fixed and comparable and no fee or deadline intervenes. Sorting by interest rate is the cheapest order available for a given budget. What is left is how large the difference is on a particular set of debts.

Do they take different amounts of time?

On this pair, no: both clear in 19 months. The snowball closes the small card in month 5 rather than month 19. Time to a first closed account is not the same as time to a clear file.

Should I close a card once it is paid off?

Paying to zero and closing the account are separate acts. Closing can raise utilisation by removing a limit. How credit scores work is that file.

Keep reading

This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.