American households carry an average of $104,000 in total debt. If that number feels familiar, you're not alone — and more importantly, you're not stuck. Thousands of people eliminate five and six figures of debt every year using one of two proven strategies.
The debt snowball and debt avalanche are both systematic approaches to paying off debt. They use the same basic principle — focus extra payments on one debt at a time — but they differ in which debt you attack first. That difference matters more than you might think.
The Two Methods at a Glance
Debt Snowball
List all debts from smallest to largest balance. Make minimum payments on everything, then throw every extra dollar at the smallest debt. When it's gone, roll that payment into the next smallest.
Debt Avalanche
List all debts from highest to lowest interest rate. Make minimum payments on everything, then throw every extra dollar at the highest-rate debt. When it's gone, roll that payment into the next highest.
Real Example: $18,500 in Debt
Let's make this concrete. Say you have these four debts and can put $500/month total toward debt payoff:
Your Debt Snapshot
Total minimum payments: $500/month. Let's say you find an extra $200/month to accelerate payoff, giving you $700/month total. Here's how each method would handle it:
Snowball Order (smallest balance first):
Medical bill ($1,200) → Credit card #1 ($3,800) → Credit card #2 ($6,500) → Car loan ($7,000). You'd knock out the medical bill in about 3 months, giving you a quick win and freeing up $50/month to roll into the next debt. The psychological boost of eliminating a debt that fast is powerful.
Avalanche Order (highest interest first):
Credit card #1 (22.9%) → Credit card #2 (18.5%) → Car loan (6.5%) → Medical bill (0%). You'd attack the expensive credit card debt first, saving money on interest — but it takes longer before you eliminate your first debt entirely.
In this example, the avalanche saves about $360 and one month. That's meaningful — but not dramatic. In many real-world cases, the difference is similar: the avalanche is mathematically better, but the snowball isn't far behind.
Step-by-Step: Start Your Debt Payoff Plan
List every debt you owe
Pull all your balances, interest rates, and minimum payments into one place. Check your credit report for free at AnnualCreditReport.com to make sure you haven't missed anything.
Choose your method
If you need motivation and quick wins, go snowball. If you're disciplined and want to minimize interest, go avalanche. Either way, commit to it.
Find extra money in your budget
Even $50-100 extra per month makes a significant difference. Cut a subscription, sell something, or pick up a side gig temporarily. Every extra dollar goes to your target debt.
Automate your payments
Set up automatic minimum payments on all debts (so you never miss one), then manually send extra to your target debt on payday — before you can spend it on something else.
Track your progress visually
Print a debt payoff tracker, use an app, or even color in a thermometer chart on your wall. Seeing progress is fuel for the journey.
Celebrate each debt eliminated
When you pay off a debt, acknowledge it. Not with a shopping spree — but with something meaningful. You earned it.
Accelerators: Pay Off Debt Even Faster
Balance Transfer Cards
If you're carrying high-interest credit card debt, a 0% APR balance transfer card can save you hundreds or thousands in interest. Many cards offer 15-21 months at 0% APR, giving you a window to pay down principal without interest working against you.
The best balance transfer cards charge a 3-5% transfer fee but offer 0% APR for 15-21 months. On a $5,000 balance at 22% APR, transferring to a 0% card (with a 3% fee) saves you roughly $1,000+ in interest over 15 months. That's real money back in your pocket.
Look for cards with the longest 0% period and lowest transfer fee. Pay off as much as possible before the promotional period ends, because rates jump to 20%+ afterward.
Compare Balance Transfer Cards →Debt Consolidation Loans
If you have multiple debts at different rates, a debt consolidation loan combines them into a single payment at (hopefully) a lower interest rate. This works especially well if your credit score has improved since you originally took on the debt.
Personal loan rates typically range from 6-36% depending on your credit. If your credit card rates are 20%+, even a 12% consolidation loan saves you significantly — and the simplicity of one payment instead of four can help you stay on track.
The Windfall Rule
Tax refund, work bonus, birthday cash, stimulus check — commit right now to sending at least 50% of any unexpected money toward debt. A single $2,000 tax refund directed at your target debt can shave months off your payoff timeline.
Which Method Should You Choose?
Choose the Snowball if: You've tried paying off debt before and quit. You have lots of small debts that would feel great to eliminate. You're motivated by visible progress and quick wins. The interest rate difference between your debts isn't huge.
Choose the Avalanche if: You have one or two debts with very high interest rates (20%+). You're naturally disciplined and don't need motivational wins. The math matters to you and you want to minimize total cost. You're patient enough to stick with a longer first payoff.
Or try a hybrid: Start with snowball to get one or two quick wins and build momentum, then switch to avalanche for the remaining debts. Many financial advisors recommend this approach as the best of both worlds.
After the Debt Is Gone
Once you make that final payment, resist the urge to immediately increase your lifestyle. Instead, redirect every dollar you were putting toward debt into building wealth. You've already proven you can live on less — now that "less" becomes your savings rate.
Your first priority after becoming debt-free: make sure you have a fully funded emergency fund. This prevents you from ever falling back into debt when life throws a curveball.