Avalanche vs. snowball: what the 'motivation' method actually costs

By DecisionSheet · Updated September 22, 2026 · 2026 tax figures

The debt avalanche and the debt snowball are two rules for deciding which debt gets any money left over after the minimum payments. Both spend the same amount every month until the last. They differ only in where the extra goes, so the whole difference between them is interest, and the time that interest adds.

DecisionSheet's debt payoff calculator runs both rules side by side on the same debts and the same budget. On a four-debt household with $25,000 owed, the snowball costs $4,503 in interest and the avalanche $3,833: $670 more for the snowball, or 17% on top of the avalanche's interest bill. The snowball also clears its first debt in month 4, 12 months before the avalanche clears any.

The two rules

Each month the model does the same three things under both methods. It charges each debt one-twelfth of its annual percentage rate (APR) on the balance; it pays every debt its minimum; and it sends the extra payment, plus the minimum of any debt already cleared, to one priority debt. Once a debt is gone, its minimum is rolled over rather than kept, so the monthly outlay stays level.

• Avalanche: the priority debt is the one with the highest APR; a tie goes to the smaller balance.
• Snowball: the priority debt is the one with the smallest current balance; a tie goes to the higher APR.

The case usually made for the snowball is behavioral: clearing whole accounts early is said to keep people paying. That is a claim about people, not arithmetic, and the calculator has no term for it. One peer-reviewed study of a related question, using client data from a debt settlement firm, found that closing accounts predicted eventually clearing all debt regardless of the dollar balance of the accounts closed; the authors wrote that completing discrete subtasks "might motivate" people to persist (Gal and McShane, 2012). What the model can say is what that ordering costs in dollars.

Four debts, one budget

The household owes four debts:

The minimums total $720, and the household pays $400 a month on top, a fixed budget of $1,120 under either method. Open this scenario.

The two methods rank the debts differently. The snowball starts with the medical bill, the smallest balance, then credit card 2, then credit card 1. The avalanche starts with credit card 1, the highest rate, then credit card 2, and never sends extra money to the medical bill at all: at 0% it ranks last, and its own $60 minimum clears it in month 25. The auto loan is the last debt cleared under both.

In the snowball, credit card 1, the largest card and the one at 27.99%, receives only its $300 minimum until credit card 2 is gone in month 9. The extra money in those months goes first to a 0% balance and then to a 19.99% one, while the 27.99% balance keeps accruing. The two runs share every input; the order of priority is the only difference, so it accounts for the whole $670.

For scale, paying only the minimums, with no extra and no rolling over of cleared minimums, the same debts take 55 months and cost $9,912 in interest. Against that line the avalanche saves $6,079 and the snowball $5,409; the choice between the two methods is worth $670 of it.

Why the gap is the size it is

The two methods differ only in which debt the extra goes to. Two variations on the same household show how the gap moves when the balance ranking and the rate ranking come closer together.

Swap the two cards' rates. Give credit card 2, the smaller card, the 27.99% rate and credit card 1 the 19.99% rate, and change nothing else. Now the smaller card is also the dearer one, so both methods pay the cards in the same order. The only place the two orders still differ is the medical bill, which the snowball clears first, in month 4, and the avalanche leaves to its minimum. Open this scenario.

The avalanche still pays less, but the gap falls from $670 to $370, and both now finish in the same month.

Then remove the medical bill. With only the two cards and the auto loan, ranking by balance and ranking by rate give the same order, and the two rules produce the same run. Payoff order, months (26) and interest ($3,240) are identical, and the calculator reports the two methods as tied. Open this scenario.

Across the three runs the gap follows the disagreement between the two rankings. Where they disagree about both cards and the medical bill, the snowball pays $670 more; where they disagree only about the medical bill, $370; where they agree, nothing. In the last run, where the smallest debt also carries the highest rate, the two methods are the same method.

Assumptions and limits

• Fixed rates. Every APR stays the same until the debt is paid. A promotional rate that ends, or a variable rate that moves, is not modeled, and the avalanche's ranking depends on the rates.
• Monthly interest. The model charges one-twelfth of the APR on each month's balance. Many card issuers calculate interest daily on the average daily balance (CFPB), so a real statement will differ.
• No new charges. Balances only fall; nothing is added to a card while it is being paid down.
• Fixed minimums. Each minimum is the amount entered and does not fall as the balance falls. A cleared debt's minimum rolls to the priority debt under both methods; the minimums-only comparison does not roll it over.
• No fees. Late fees, annual fees and balance-transfer fees are not modeled.
• Horizon. The simulation stops at 480 months (40 years); a plan still in debt then is reported as not paid off, with no interest comparison. All three scenarios here finish far inside it.
• No behavior. Both methods are assumed to be followed exactly, every month. Any effect of early wins on whether a plan is kept up is outside the model.

Method and sources

The model is calculateDebtPayoff in the debt avalanche vs. snowball calculator. It simulates each method month by month on the same debts, as described under the two rules above; money left over when a debt clears spills to the next priority debt in the same month. Total interest is the sum of interest paid over the run; months to debt-free is the month the last balance reaches zero. Every figure above comes from running the model on the inputs in the scenario links.

• Gal, D., and McShane, B. B. (2012), "Can Small Victories Help Win the War? Evidence from Consumer Debt Management," Journal of Marketing Research 49(4), 487–501 — in data from a debt settlement firm, closing debt accounts was predictive of eliminating debt regardless of the dollar balance of the accounts closed.
• CFPB: How does my credit card company calculate the amount of interest I owe? — many issuers calculate interest daily, based on the average daily balance.

Open this scenario in the calculator

All figures on this page come from the Debt Avalanche vs. Snowball calculator. Change any input there and the numbers update.