Two pieces of advice about clearing debt are both popular and they contradict each other. One says to attack the highest interest rate first, because that is where the money is leaking. The other says to clear the smallest balance first, because finishing something keeps you going. The first is cheaper. The second is easier to stick to. Which matters more depends on numbers you can actually work out.
Enter your debts below and the calculator runs both strategies month by month against the same budget, so you can see what the difference is worth in interest and in time before choosing.
This is for anyone paying more than one debt at once and wondering which to attack first. If you have a single debt the answer is already clear — pay what you can at it — and the comparison here has nothing to tell you.
This calculator needs JavaScript. The short version without it: list your debts with their interest rates, pay the minimum on all of them, and put every spare pound against whichever has the highest rate. When that one clears, move its whole payment onto the next highest. That is the avalanche method, and it is always the cheapest order.
How the two methods differ
Both methods pay the minimum on every debt every month. The only decision is where the spare money goes, and what happens when a debt clears.
The avalanche method sends everything spare to the debt with the highest interest rate. When that one is gone, its entire payment — minimum plus extra — rolls onto the next highest rate. Because you are always attacking the most expensive borrowing you have, this order mathematically cannot be beaten on cost.
The snowball method sends everything spare to the smallest balance instead, regardless of its rate, then rolls that payment onto the next smallest. You clear individual debts sooner, so the list gets shorter faster, and for a lot of people that is the difference between continuing and giving up.
The rolling-over is what makes either work. A payment freed up by clearing one debt is the cheapest money you will ever find for clearing the next, because you were already living without it.
A worked example
Three debts totalling $9,700, with $200 a month spare beyond the minimums:
- Store card, $2,500 at 26.9%, minimum $75
- Visa, $6,000 at 22.9%, minimum $150
- Personal loan, $1,200 at 8.9%, minimum $60
The two methods disagree about where the $200 goes. Avalanche sends it to the store card, then the Visa, then the loan. Snowball sends it to the personal loan first, because $1,200 is the smallest balance, even though it is the cheapest debt to carry.
Both clear everything in 26 months. Avalanche costs $2,478 in interest, snowball $2,683. The whole difference is $205, and no time at all.
The reason they finish together is the rollover. Every minimum payment stays in the pot when its debt clears, so the order you choose changes which debt gets the freed-up money first, not how much money there is. On a spread like this that largely cancels out.
Which makes the choice easier than it is usually presented. $205 over more than two years is real money, but it is not the difference between succeeding and failing. If clearing the personal loan in the first few months is what keeps you paying, take the snowball and the $205 with it — the plan you finish beats the plan you optimise.
When the minimum payment is the problem
There is a case where neither method helps, and it is worth checking for before anything else: when the minimum payment is smaller than the monthly interest charge. The balance then grows every month even though you have paid on time and in full, and no ordering of payments can fix it.
The calculator flags this if it finds it. The only ways out are paying more than the minimum, moving the balance somewhere with a lower rate, or getting the rate reduced — and if none of those are available, that is the point at which free debt advice stops being optional.
What the numbers assume
Interest is applied monthly at a twelfth of the APR you entered. Most credit cards actually compound daily, which costs slightly more than shown, so treat the interest figures as a floor. Rates are assumed to hold steady, minimum payments are assumed not to fall as the balance does (most issuers recalculate them, which makes real repayment slower), and the projection assumes you add no new borrowing.
None of that changes which strategy wins — it changes the size of the numbers, not their order.
If the extra payment line is where you are stuck, the subscription audit is the usual place to find the first hundred a month, and our spending guides cover the rest.