The short answer: the avalanche method (paying off the highest interest rate first) always costs the least interest, and usually gets you debt free soonest. The snowball method (paying off the smallest balance first) costs a little more, but clears your first debt much sooner, which helps many people keep going. In our example of three credit cards, the avalanche finished 2 months sooner and saved £556 of interest; the snowball cleared its first card 17 months earlier. Either beats paying only what each debt asks for.
What the two methods share
Both methods work the same way, apart from which debt you aim at:
- Keep paying every debt what it needs each month, so nothing is missed and no late fees are added.
- Find a fixed amount you can pay towards debts each month, including a little extra if you can. A monthly budget shows what you can afford.
- Put every spare pound on one target debt until it is gone.
- Roll the payment on. When a debt is cleared, the money you were paying on it moves to the next target, so the amount you pay in total stays the same while the debts fall faster and faster.
Rolling payments on is what does most of the work. The only question is the order.
The avalanche: highest interest first
List your debts by interest rate (APR), highest first, and aim the extra at the top one. Interest is charged on what you still owe, so clearing the most expensive balance first means less of your money goes on interest and more goes on the debt itself.
The catch is that the highest-rate debt may also be one of the biggest, so it can take a long time before anything is fully paid off. If you lose heart in that gap, the plan only works on paper.
The snowball: smallest balance first
List your debts by how much you owe, smallest first, and aim the extra at the smallest one, whatever its interest rate. You clear a whole debt quickly, then another, and each one cleared frees up its payment for the next.
The catch is that a large, expensive debt keeps charging interest at its full rate while you clear the small ones, so the snowball usually costs more in total. How much more depends on how far apart the interest rates are.
A worked UK example
Three credit cards, with £300 a month to pay towards them: the £200 the cards ask for, plus £100 extra.
The avalanche aims the extra £100 at Card A, the highest APR. The snowball aims it at Card C, the smallest balance. Both roll each cleared card's payment on to the next.
What it shows:
- The avalanche saves £556 of interest and finishes 2 months sooner, because the 34.9% card is cleared first.
- The snowball clears a card in month 7, against month 24 under the avalanche, and Card B goes in month 20. That early progress is the whole point of the snowball.
- Either method is far better than drifting. Paying only the £200 the cards ask for, with nothing extra and nothing rolled on, takes over seven and a half years and costs more than three times the interest.
Each month's interest here is the balance x APR / 12, with fixed payments. Card companies usually work interest out daily and minimum payments fall as balances fall, so real statements differ a little. Try your own debts in the free debt payoff calculator.
Which one should you choose?
- If the interest rates are far apart, as with a 39.9% overdraft beside a 9.9% loan, the avalanche saves real money. MoneyHelper notes overdraft rates can be around 40%.
- If the rates are close, the two methods cost almost the same, so pick the snowball for the quicker wins.
- If your smallest debt also has the highest rate, both methods agree: clear it first.
- If you have tried before and given up, the snowball's early wins may be worth the extra interest. A plan you stick to beats a cheaper one you abandon.
- A middle way: clear one or two very small debts first for the boost, then switch to highest rate first.
Priority debts come first
Snowball and avalanche are for non-priority debts such as credit and store cards, overdrafts, personal loans and catalogue accounts. Some debts carry much more serious consequences if you fall behind, whatever their size or interest rate. MoneyHelper calls these priority debts, and they include:
- rent, mortgage and any loans secured on your home
- Council Tax
- gas and electricity
- the TV Licence
- court fines, child maintenance, and tax owed to HMRC
Missing these can lead to bailiffs, court action, disconnection or losing your home. Keep them up to date first, then use the snowball or avalanche on the rest.
Where 0% balance transfers fit
A balance transfer moves a card balance to a new card, often at 0% interest for an introductory period. It can make either method much faster, because every pound you pay comes off the balance. Before you apply, MoneyHelper points out:
- There is usually a fee for each balance moved, often around 2% to 4% of the amount, added to the balance. Check the fee costs less than the interest you save.
- Clear it before the 0% period ends. After that, the rate jumps to the card's standard rate.
- New spending may not be at 0%, so keep the card for the transferred balance only.
- Do not count on another deal to move the balance again when this one ends.
In an avalanche, a 0% card sits at the bottom of the list while its deal lasts, then moves up when the rate rises. Work out what you need to pay each month to clear it in time: the balance divided by the months of the deal.
Free debt advice
If you are missing payments, using credit to pay bills, or only ever paying the minimum, talk to a free debt adviser before you borrow more. These services are free and confidential:
Avoid companies that charge for debt help: the services above never do.
Sources
Checked on 8 November 2026. The worked example is calculated with the same method as the free debt payoff calculator.
Planning tool, not financial or debt advice. This guide explains how the two methods work in general. For advice on your own debts, speak to one of the free services above.
