Debt Payoff Calculator Canada

Snowball vs Avalanche: Which Debt Payoff Method Is Right for You?

If you're carrying debt (and 29% of Canadians carry credit card debt month-to-month), you've probably heard about the snowball and avalanche methods. But which one actually works better?

Short answer: it depends. Let me explain both methods honestly, so you can choose what fits your situation.

What Is the Debt Snowball Method?

The snowball method focuses on psychological momentum. You pay off your smallest debt first, regardless of interest rate.

How it works:

1. List all debts from smallest to largest balance
2. Pay minimums on everything except the smallest debt
3. Throw all extra money at the smallest debt
4. Once that's paid off, roll that payment to the next smallest
5. Repeat until debt-free

Why it works: You get quick wins. Paying off that first debt feels amazing. That motivation keeps you going when you're tempted to give up.

What Is the Debt Avalanche Method?

The avalanche method focuses on mathematical optimization. You pay off your highest-interest debt first.

How it works:

1. List all debts from highest to lowest interest rate
2. Pay minimums on everything except the highest-interest debt
3. Throw all extra money at the highest-interest debt
4. Once that's paid off, tackle the next highest interest rate
5. Repeat until debt-free

Why it works: You save the most money. Interest is what keeps you in debt longer. Kill the highest-interest debts first, and you stop bleeding money the fastest.