Snowball vs Avalanche: Best Way to Pay Off Debt
Should you use the Snowball or Avalanche method to pay off debt? Both work, but which is best for Canadians carrying credit card balances? In this video, we explain the difference, give real-life examples, and help you decide which strategy works for your situation.
When it comes to paying off debt, two strategies come up again and again.
Snowball and avalanche. Which run is right for Canadians trying to get out of
credit card debt? Let’s break it down.
With the snowball method, you pay off the smallest balance first. Once that debt is gone, you roll that payment into the next one, and so on. The motivation comes from these quick wins. Crossing debts off your list helps keep you moving.
With the avalanche method, you target the highest interest balance first. This saves you the most money over time because you’re cutting down interest faster. Let’s say you’ve got $15,000 in credit card debt spread across three cards, all with different interest rates. For example, if one card has a 24% rate, knocking that out first can save you hundreds, even thousands in interest.
But if you need quick wins to stay motivated, the snowball method might be better. That means starting with the smallest balance, even if the interest rate is lower, so you can see the
progress fast. At the end of the day, the right method is the one that you’ll actually stick with.
If you’re not sure which method is right for you, Consolidated Credit Canada can help.
Visit consolidatedcreditanada.ca for a free consultation and get a debt-free strategy that works for your budget.
