Debt snowball
Updated
Debt snowball is a payoff order. Every debt receives its contractual minimum. Any extra money goes to the open debt with the smallest balance. When that balance hits zero, its minimum joins the extra payment on the next-smallest balance. Ties on this site break toward the higher APR, then the name.
The order is not the interest-minimizing order when APRs differ. It spends more interest, by design, so that one account reaches zero sooner. Research on repayment concentration found that focusing a month’s payment on fewer accounts, especially the smallest one, can increase a person’s motivation to keep paying. That is a finding about behavior, not a claim that the interest is lower.
Snowball does not delete a tradeline, change an APR, or move a credit score by a stated number of points. Use it when the value of closing an account outweighs the extra interest the arithmetic shows. Use avalanche when the same extra payment will actually be made either way and the goal is the smaller interest total.