Debt Snowball vs. Debt Avalanche: Which Is Better for Paying Off Credit Card Debt?

Debt Snowball vs. Debt Avalanche. There are advantages and disadvantages to both strategies, but before we delve into the specifics, it is essential to understand why making only the minimum payments on a credit card will keep you in a cycle of debt.

Debt Snowball vs. Debt Avalanche: Which Is Better for Paying Off Credit Card Debt?

Debt Snowball vs. Debt Avalanche: Which Is Better for Paying Off Credit Card Debt?

Know that you're not alone if you're in credit card debt. Recent data from the Quarterly Household Debt and Credit Report of the New York Federal Reserve indicate that Americans owe around $986 billion on their credit cards beginning in the fourth quarter of 2022.

Most individuals pick between the debt snowball and the debt avalanche when it comes to paying off their personal credit card debt.

The difference between them is which one will push you to stay on track more effectively. The debt snowball focuses on providing a psychological boost, whereas the debt avalanche emphasizes data.

There are advantages and disadvantages to both strategies, but before we delve into the specifics, it is essential to understand why making only the minimum payments on a credit card will keep you in a cycle of debt.

Minimum Credit Card Payments

Minimum monthly payment requirements for credit cards vary from issuer to issuer, but are normally between 1% and 3% of the outstanding balance. The terms of your credit card will specify precisely how the monthly minimum payment is calculated. Regardless of the exact amount, the minimum payment on a $10,000 balance will be little more than a couple hundred dollars.

A minimum payment that is affordable may make it more attractive to only pay the minimal sum each month. Yet, paying only the minimum payment is a costly practice that can lead to accumulating interest charges and transform a manageable sum into a source of anxiety.

Best Methods To Repay Credit Card Debt

Paying off credit card debt is difficult for most people. Other than paying off a high balance with a single lump-sum payment, there are typically three approaches to address a large debt:

- Debt consolidation. This is the process of obtaining a new loan or credit card, hopefully at a lower interest rate than you are now paying, and transferring your other high-interest debts to the new loan. For some, paying a single monthly bill is more convenient and keeps them on track than paying many bills at different times.

- Debt snowball. This strategy requires you to pay off the card with the smallest balance first, followed by the card with the next-smallest balance, and so on. Some believe that this method provides the necessary psychological boost to adhere to their debt payback strategy.

- Debt avalanche. With this strategy, the card with the highest interest rate will receive the largest payment. This strategy may take longer, but you will pay less interest and pay off your debts more quickly.

Debt Snowball

Regarding debt repayment, there is no single optimal strategy for everyone. Let's examine the pros and cons of adopting the debt snowball method to pay off credit card debt in further detail.

The Debt Snowball Method: Pros and Cons


- As you pay off a credit card, you gain the motivation to keep to your financial strategy.

- Gives a psychological lift when your debt is paid off one card at a time.

- Every time you reduce the need to pay on one card, you'll have more money to put toward the next card payment, creating a snowball effect.


- This strategy will take you longer to pay off your debts than the debt avalanche method.

- It’s also more expensive then the debt avalanche since you’ll pay more in interest over time

When Should You Utilize the Snowball Technique to Eliminate Debt?

If you need a little extra push to stay on track with your debt repayment plan and find it inspiring to see your debt dwindle away one card at a time, the snowball method may be the way to go.

Debt Avalanche

The debt avalanche may be suitable for someone who is more disciplined and seeks the fastest and least expensive way to pay off their debt.

The Debt Avalanche Method: Pros and Cons


- You will save more money over time if you pay off the cards with the higher interest rates first.
- Also, you'll reduce your debt more quickly, as the interest charges will fall as your debt decreases.


- It could take longer to see major progress.
- It may be more difficult to remain motivated.

Debt Snowball vs. Debt Avalanche

It's possible that your card with the highest balance also has the lowest interest rate. If so, you're in luck! In certain situations, there may not be a significant difference between the avalanche and snowball methods. Use our credit card repayment calculator to determine if there is a significant difference between various payment strategies and to select the one that best suits your needs.

Source: Vincere Wealth

If You're Drowning in High Interest Rates: 

If you're committed to making monthly payments but are overwhelmed by the amount of debt you're confronting, it may make sense to look into other options if the snowball or avalanche methods aren't enough. We'd recommend speaking with a financial advisor.

Transfer Balance Credit Card

By giving a promotional initial 0% APR for a specified period of time, often between six months and nearly two years, a balance transfer can help accelerate the repayment of debt. Transferring your high-interest debt to this card allows you to continue making monthly payments. As the entirety of your payments will be applied to the principal during the term of the offer, you will make more progress than if you were required to pay both interest and principal.

These cards typically require a high credit score as a stipulation. If your credit is poor, this option may not be available. Keep in mind that the majority of balance transfer credit cards have a balance transfer fee, which is normally between 3% and 5% of the amount being transferred and can add to your existing debt.

Debt Consolidation For Credit Cards

A debt consolidation loan could be another choice for managing your debts. This option allows you to apply for an unsecured personal loan with an usual repayment period of three to seven years. These loans often feature lower interest rates than credit cards and are repaid on a predetermined monthly basis, sometimes known as installment plans.

Although a debt consolidation loan will not immediately lower the total amount of debt you owe, it can help reduce the interest you pay. If you qualify for a loan, your overall credit utilization will be reduced, which may help improve your credit score.

Bottom Line

If you want to make progress on your credit card debt, a debt repayment plan is a key first step in the right direction. Your specific circumstances and preferences will determine whether the debt snowball or debt avalanche strategy will work best for you. If you are still uncertain, you can reach out to one of our advisors here, free of charge.

I hope this information was helpful! If you have any questions, feel free to reach out to me here. I’d be happy to chat with you.

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About the Author

As Managing Partner of Vincere Wealth, Josh assists clients in navigating financial challenges and making sound financial decisions. Having someone guide you in making sensible financial decisions today can have a substantial impact on your future financial wellbeing. Josh takes great pride in guiding customers through the complexities of taxes, real estate, businesses, employer stock and international financial planning.

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This post is just for informational purposes and is not meant to be financial, legal, business, or tax advice. Regarding the matters discussed in this post, each individual should consult his or her own financial advisor, attorney, business advisor, or tax advisor. Vincere Wealth Management accepts no responsibility for actions taken in reliance on the information contained in this article.

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