Both methods, in one sentence
With both you pay the minimum on every debt and send all spare money to a single one. When that one falls, its payment joins the attack on the next: that is why the snowball grows. The only difference between the methods is which one you pick first.
- Snowball: you attack the smallest balance first, ignoring the rate. You get quick wins.
- Avalanche: you attack the highest interest rate first. Mathematically optimal: you pay less interest.
Which one should I pick?
The avalanche wins on the spreadsheet. The snowball wins in real life, because people finish it. Research from the Kellogg School of Management found that those who start by clearing small debts are more likely to complete the whole plan: the motivation of crossing a debt off matters more than it looks.
Rule of thumb: look above at how much the avalanche saves you with your numbers. If the gap is small, go with the snowball and enjoy the wins. If you are carrying a card at a punishing rate, the avalanche saves real money: start there.
Before you accelerate payments: put aside a minimum emergency cushion (around 500 in your currency). Without it, the first surprise sends you back to the credit card and undoes months of effort.
How to find the extra payment
The engine behind all of this is the amount you can put in above the minimums. Raise the extra payment in the calculator and watch the months drop: the effect is not linear, because every extra unit hits the principal directly and cancels all the future interest that principal would have generated.
- Cancel subscriptions you do not use and send the whole amount to the plan.
- Put 100% of windfalls (bonuses, tax refunds) towards it.
- If you manage to renegotiate a rate or move a balance to a lower-interest card, update the numbers here and calculate again.
A warning about minimum payments
This calculator assumes your minimum payments are fixed. On many credit cards the minimum is a percentage of the balance, so it falls as you pay down — and that stretches the timeline if you only ever pay the minimum. Keeping the payment fixed even as the minimum drops is, on its own, one of the most profitable decisions you can make.