Snowball vs. Avalanche: Debating How to Best Beat Debt


The first step to beating debt is acknowledging it. Debt denial and other psychological stressors can make it difficult sit down and take an honest look at your finances. But then what? The next steps are often unclear, even once you have a better idea of your outstanding balances. This is because there’s no one true path to beating debt. Everyone has a different journey, and the best course of action really depends on a combination of factors: type of debt, amount of debt, income, living situation, etc.

Learning more about proven debt elimination methods can provide a helpful framework for consumers looking to tackle their own financial obligations. While there’s no guaranteed, one-size-fits-all approach, there are a number of methods that have worked for many other consumers in similar situations. Each has its own set of advantages and disadvantages to carefully consider.

Two popular methods are called “snowball” and “avalanche,” respectively. Here’s a closer look at snowball vs. avalanche in the debate on how to best beat debt.

The Snowball Method

The debt snowball method involves paying off debts from smallest to largest, regardless of interest rates. As you pay off your debts, you reallocate your funds to tackling the next-largest debt. The underlying principle here is that the victory of paying off debts will keep consumers more engaged and committed to truly wiping out their debt once and for all. It principle evokes the momentum of rolling a snowball, hence the name.

This method takes advantage of the psychological boost people get when they see tangible results. Instead of throwing money at a large debt that never seems to disappear, it can feel more manageable and productive to focus on smaller debts first. Of course, consumers must still budget enough to pay the minimum balance on all debts or they’ll accumulate costly late fees.

The downside to the snowball method is that it does not necessarily address debts with high interest rates first. So, consumers must decide whether the psychological component is worth the extra time and money it may take to pursue this strategy.

The Avalanche Method

The debt avalanche method, on the other hand, focuses on high-interest debt first. The principle is simple: “This idea is to target high-interest debt that is likely costing you the most money in interest payments.” Since high interest rates can keep digging the debt hole deeper, it often makes logical sense to prioritize these more expensive debts while making minimum payments on others. The primary drawback is that it can be less motivational, as this strategy focuses less on psychological incentive and more on efficiency.

Other Debt Relief Options

Sometimes, consumers may find themselves in over their heads in debt. In these cases, repayment alone may feel like mere drops in the bucket. For this reason, some consumers choose a route like debt settlement because it aims to reduce the actual principal amount owed. As with any debt solution, it’s important to do your research, looking up reviews on Freedom Debt Relief and other partners before enrolling in a program.

Beating Debt: An Overview

The underlying principle here is that it’s important to pay more than the minimum balance on your credit card debt. Pushing off your debt for another day only buys you time in the present; it doesn’t actually solve the underlying issue. The time you invest up front acknowledging your debt, asking key questions and selecting the right strategy will help you commit to whichever course of action you choose. It’s well worth considering snowball vs. avalanche vs. debt relief when you’re exploring potential options. Each route has strengths and weaknesses.

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