If you're trying to get out of debt, you've probably heard of two main strategies: the Debt Snowball and the Debt Avalanche. Both work, but they use completely different psychology and math.
With the Snowball method, you list your debts from smallest balance to largest. You pay the minimum on everything, and throw all your extra money at the smallest debt.
Pros: Quick psychological wins. You see accounts close fast, which keeps you motivated.
Cons: You might pay more in interest if your smallest debt has a high interest rate.
With the Avalanche method, you list your debts from highest interest rate to lowest. You pay the minimum on everything, and throw all your extra money at the highest-interest debt.
Pros: Mathematically, this saves you the most money on interest. You pay less overall.
Cons: It can take longer to close your first account, which can be demotivating.
If you have a lot of small debts and need motivation, go with the Snowball.
If your highest-interest debt is massive (like a credit card at 25%), and you want to save money, go with the Avalanche.
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