Question 1

Which pays off debt faster, the snowball or avalanche method?

Accepted Answer

Mathematically, the Debt Avalanche method (targeting the highest interest rate first) always results in paying less total interest and becoming debt-free sooner. The gap between the two methods widens the more high-interest debt you carry.

Question 2

Why do people recommend the snowball method if avalanche is mathematically better?

Accepted Answer

Because math doesn't drive behavior — psychology does. The Snowball method delivers quick wins by eliminating small balances first, which research shows dramatically improves adherence for many people. A plan that isn't followed delivers zero real-world savings; the 'best' method is the one you'll actually stick to.

Question 3

What happens to my monthly payment when I pay off a debt?

Accepted Answer

You 'roll' it forward. Under both methods, when a debt reaches zero, the amount you were paying toward it is added to the minimum payment of the next target debt. This creates a payment 'snowball' (or 'avalanche') that accelerates your payoff velocity dramatically over time.

Question 4

How much does a $100/month extra payment actually matter?

Accepted Answer

On a $10,000 credit card balance at 20% APR with a $200 minimum, adding $100/month extra reduces your payoff time from roughly 10 years down to under 4 years, and saves approximately $6,000 in total interest. The earlier you add extra payments, the more the interest savings compound.

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