The Psychological Power of the Snowball
The Debt Snowball was popularised by financial experts like Dave Ramsey. It works because debt is often a behavioural problem, not just a math problem. By clearing your smallest balance first—regardless of how high the interest rate is on your other debts—you get a hit of dopamine.
That feeling of "one debt down" is what keeps people going when the journey gets tough. If you have five different credit cards and loans, seeing that list shrink to four within the first few months is a powerful motivator.
The Mathematical Logic of the Avalanche
If you are a numbers person, the Debt Avalanche is almost always the superior choice. By directing every extra penny to the debt with the highest interest rate, you stop that specific debt from "growing" as fast as possible.
Mathematically, the Avalanche will always result in you paying less total interest to the banks and becoming debt-free faster. The trade-off is that if your highest-interest debt is also your largest balance, you might go months or years without the satisfaction of crossing a debt off your list.
The "Correct" Answer
The correct strategy is the one you will actually follow. A mathematically perfect plan that you quit after three months is worth nothing compared to a "less efficient" plan that you follow until the end.
Our advice? If you find motivation easy and just want the lowest cost, use the Avalanche. If you feel overwhelmed and need early wins to keep going, use the Snowball.