{"id":7274,"date":"2026-03-11T11:58:33","date_gmt":"2026-03-11T16:58:33","guid":{"rendered":"https:\/\/stpaulfcu.org\/?post_type=education&#038;p=7274"},"modified":"2026-03-11T11:58:33","modified_gmt":"2026-03-11T16:58:33","slug":"snowball-method-vs-avalanche-method-whats-the-best-way-to-tackle-debt","status":"publish","type":"education","link":"https:\/\/stpaulfcu.org\/education\/snowball-method-vs-avalanche-method-whats-the-best-way-to-tackle-debt\/","title":{"rendered":"Snowball Method vs. Avalanche Method: What&#8217;s the Best Way to Tackle Debt?"},"content":{"rendered":"\n<p>Getting rid of debt isn\u2019t easy, but if you\u2019re ready to do what it takes, you can shake off any amount of debt.<\/p>\n\n\n\n<p>Let\u2019s take a look at two popular methods to tackle debt and explore the pros and cons of each.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-the-debt-snowball-method\"><strong>The Debt Snowball Method<\/strong><\/h2>\n\n\n\n<p>This approach involves focusing on paying off the smallest debt first and then working on the next-smallest debt until it\u2019s all paid off.<\/p>\n\n\n\n<p>Say you\u2019ve squeezed an extra $500 out of your budget to channel toward paying down debt and you have the following debts:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>$2,500 personal loan at 9.5% interest; minimum payment $50<\/li>\n\n\n\n<li>$10,000 car loan at 3% interest; minimum payment $200<\/li>\n\n\n\n<li>$13,000 credit card debt at 18.99% interest; minimum payment $225<\/li>\n\n\n\n<li>$18,000 student loan at 4.5% interest; minimum payment $300<\/li>\n<\/ul>\n\n\n\n<p><br>In this scenario, the snowball method would have you paying just the minimum payment on all debts except for the smallest one. You\u2019d put your extra $500 toward paying off the personal loan. Once that\u2019s paid off, you\u2019d take the $550 you were paying toward the personal loan and add it to the $200 you\u2019re paying for the car loan. Keep doing this until you\u2019ve kissed all your debts goodbye!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-pros-of-the-debt-snowball-method\"><strong>Pros of the Debt Snowball Method<\/strong><\/h2>\n\n\n\n<p>The most significant draw of the debt snowball method is that it works with behavior modification. Success breeds success, and the small but quick wins are excellent motivators.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-cons-of-the-debt-snowball-method\"><strong>Cons of the Debt Snowball Method<\/strong><\/h2>\n\n\n\n<p>The primary disadvantage of the debt snowball method is its indifference toward interest rates. Paying off the smallest debt first can mean holding onto the debt having the highest interest rate the longest. This translates into paying more in overall interest throughout the journey to a debt-free life, sometimes to the tune of several thousands of dollars.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-debt-avalanche-method\"><strong>Debt Avalanche Method<\/strong><\/h2>\n\n\n\n<p>This approach involves getting rid of the debt with the largest interest rate first and then continuing on to the one with the next-highest interest rate. This enables the debt-payer to shed heavy interest rates quicker and to put more of their money toward the principal of their loans.<\/p>\n\n\n\n<p>In the scenario above, the debt avalanche method would involve paying down the credit card debt first, followed by the personal loan, student loan and finally the car loan.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-pros-of-the-debt-avalanche-method\"><strong>Pros of the Debt Avalanche Method<\/strong><\/h2>\n\n\n\n<p>Paying off the debt with the highest interest rate first can save hundreds, and sometimes thousands, of dollars in interest. Also, in most cases, this route will be shorter than the snowball method.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-cons-of-the-debt-avalanche-method\"><strong>Cons of the Debt Avalanche Method<\/strong><\/h2>\n\n\n\n<p>The debt avalanche requires self-motivation and continued momentum despite little initial progress.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-which-method-is-right-for-you\"><strong>Which Method is Right for You?<\/strong><\/h2>\n\n\n\n<p>If you think you\u2019d need early motivation to keep going, you may want to choose the debt snowball method. Is your chief concern paying as little as possible? Then you might want to go with the avalanche method. If you\u2019re serious about tackling your debt, either method can work.<\/p>\n\n\n\n<p>While you&#8217;re paying down debt, learn about <a href=\"https:\/\/stpaulfcu.org\/education\/impulse-spending-triggers-and-how-to-outsmart-them\/\">Impulse Spending Triggers and How to Outsmart Them<\/a> so you can avoid unneeded purchases.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Getting rid of debt isn\u2019t easy, but if you\u2019re ready to do what it takes, you can shake off any amount of debt. Let\u2019s take a look at two popular methods to tackle debt and explore the pros and cons of each. The Debt Snowball Method This approach involves focusing on paying off the smallest [&hellip;]<\/p>\n","protected":false},"featured_media":7275,"template":"","education-category":[194],"class_list":["post-7274","education","type-education","status-publish","has-post-thumbnail","hentry","education-category-tips-resources"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Snowball Method vs. Avalanche Method: What&#039;s the Best Way to Tackle Debt? - St. Paul Federal Credit Union<\/title>\n<meta name=\"description\" content=\"Getting rid of debt isn\u2019t easy, but it is possible. 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