First protect the required payments
The snowball approach directs extra money toward the smallest balance first. The avalanche approach directs it toward the highest interest rate first. In either approach, the starting assumption is that required payments on all other accounts continue. Neither method authorises missing a payment on an account farther down the list.
These simple rankings are most useful for ordinary unsecured balances without special complications. Arrears, essential secured debts, expiring promotions and legal consequences may need a different priority. If required payments cannot all be made, an independent qualified debt adviser can help assess the actual situation.
See why the ranking changes
Imagine Debt A is $300 at 8% and Debt B is $1,200 at 20%. After required payments, you have $100 extra. A snowball puts it toward A because A could disappear sooner. An avalanche puts it toward B because each dollar removed there avoids a higher rate of future interest.
Using annual simple-interest arithmetic only, keeping $100 off an unchanged balance for a full year would avoid $8 at 8% or $20 at 20%. Actual savings depend on timing, compounding, changing balances and contract terms. The $12 difference illustrates the rate effect rather than forecasting the two complete repayment plans.
Choose an order you can follow
With equal payments and ordinary assumptions, prioritising the highest rate generally minimises interest. Some people prefer the visible progress of closing a small balance. Compare the estimated cost difference before deciding how much that motivational benefit is worth to you.
Write your chosen order down, including what happens when one account is cleared. Redirect its former payment deliberately rather than letting it disappear into general spending. Review the ranking when a rate changes or a promotional period ends. A repayment method becomes useful through consistent execution, not through giving the spreadsheet the most impressive label. If two balances have identical rates and conditions, clearing the smaller one can simplify administration without sacrificing that rate priority.
