Once you know what you owe and at what rate, the next question is where the extra money goes. There are two well-known answers, they disagree with each other, and the argument between them has been running for decades. Both work. They just optimize for different things.
The setup they share
Both methods start identically. You pay the minimum on every debt you have, without exception, so nothing goes delinquent. Then you take whatever money you can find beyond those minimums and throw all of it at exactly one debt until that debt is gone.
When it clears, the payment you were making on it rolls into the attack on the next one. That rolling is what accelerates the whole thing, and it is why both methods speed up dramatically toward the end. The only disagreement is which debt you attack first.
The avalanche: highest rate first
Order your debts by interest rate, highest to lowest, and attack the top of that list regardless of balance. When it is gone, move to the next highest rate.
This is the mathematically optimal approach. Because you are always eliminating the most expensive debt you have, you minimize the total interest paid and, in almost every case, you finish sooner. If two people with identical debts run avalanche and snowball side by side, the avalanche person pays less.
The cost is patience. If your highest-rate debt also happens to be a large balance, you can grind on a single account for a long time without crossing anything off the list.
The snowball: smallest balance first
Order your debts by balance, smallest to largest, and attack the smallest regardless of rate. When it is gone, move to the next smallest.
This costs more in interest, sometimes meaningfully more. What it buys is a finished debt early, often within the first month or two, and then another one after that. Research on repayment behavior has repeatedly found that people who see accounts actually disappear are more likely to keep going.
The strongest argument for the snowball is not financial, it is behavioral: the best payoff plan is the one you do not quit halfway through.
How to choose in one question: have you tried paying down debt before and stopped? If yes, the snowball's early wins are probably worth the extra interest. If you have never stalled out and the math is what motivates you, run the avalanche and keep the difference.
The hybrid most people actually run
Nothing requires you to pick one and follow it religiously. A common and sensible compromise: clear one or two tiny balances first to get the list moving and build momentum, then switch to strict avalanche for everything that remains.
You get the early psychological win where it matters most, at the start, and then spend the long middle of the process on the mathematically correct path. This is usually the right answer for someone with a handful of small balances and one or two large expensive ones.
What matters more than the method
Both plans depend on the same two inputs, and those inputs matter far more than which order you choose:
- How much extra you can send each month. The gap between minimum-only and minimum-plus-anything is enormous. The gap between avalanche and snowball is small by comparison.
- Whether you stop adding new debt. Neither method survives an account you are still charging to. Paying down a card while using it is a treadmill with extra steps.
There is also a step that beats both methods outright when it is available: lowering the rate itself. Calling to request a lower APR, transferring a balance to a promotional rate, or consolidating high-rate debt into a lower-rate loan changes the math directly rather than just working within it.
Pick the one you will actually finish. A snowball you complete beats an avalanche you abandon in month four.