How debt payoff strategies work
Both methods pay every debt’s minimum each month, then throw all spare money at one target debt. They differ only in which debt is the target.
Worked example. Two cards: $2,000 at 22% and $3,000 at 15%, with a $300/month budget. Avalanche attacks the 22% card first and clears both debts while paying less total interest than snowball, which would attack the $2,000 balance first regardless of rate. With these numbers the order happens to match, but when the smallest balance also has the lowest rate, the two strategies diverge and avalanche wins on cost.
Which should you pick?
Avalanche saves the most money. Snowball gives you a quick first win, which research suggests helps people stay the course. If the interest gap between your debts is small, snowball’s motivation edge can be worth more than the few dollars of extra interest.