Two proven ways to get out of debt
Both methods work the same way: pay the minimum on everything, then throw every extra dollar at one debt at a time. When that debt is gone, its minimum rolls into the next one, so your payments grow like a snowball rolling downhill.
- Avalanche: attack the highest interest rate first. It's the cheapest plan, mathematically.
- Snowball: attack the smallest balance first. You knock out whole debts sooner, and those wins keep you going.
The best plan is the one you'll stick with. This calculator runs both so you can see exactly what the trade-off costs.
Tips to get debt-free faster
- Find a little extra. Even $50 a month on top of minimums changes the timeline a lot. Try a few amounts in the extra field.
- Stop adding new debt. Use cash or debit while you pay things off.
- Call your card issuer. Asking for a lower APR works more often than you'd think, especially with a good payment history.
- Consider a 0% balance transfer for high-rate cards, if you can clear it before the promo ends.
Did you know?
When a debt hits zero, its minimum payment doesn't disappear from your budget; it joins the attack on the next debt. That rollover is why the last debts fall so much faster than the first.
Example
Four debts totaling $25,900: a $7,500 card at 27.99%, a $900 loan at 12%, a $3,500 car loan at 7.5% and a $14,000 student loan at 6%. Paying the minimums plus $200 extra a month, the avalanche method makes you debt-free in 3 years 1 month with $4,444 in interest. Snowball takes the same time and costs $4,927, about $483 more, but clears its first debt in 4 months instead of 19. Paying only minimums would take 8 years 3 months and cost $11,303.
Frequently asked questions
Which is better, snowball or avalanche?
Avalanche always costs the same or less in interest. Snowball often costs only a little more and gives faster early wins. If the difference is small, choose the one that keeps you motivated.
Should I include my mortgage?
Usually not. Mortgages are large, low-rate and long-term. These methods are meant for credit cards, car loans, personal loans and student loans.
What if I have more than four debts?
Combine similar small debts into one line (for example, two store cards with similar rates), or start with your four largest or highest-rate debts.