If you’re in credit card debt, know that you are not alone. According to the data from the New York Federal Reserve’s Q3 Household Debt and Credit Report, Americans owe approximately $800 million to their credit cards as of the third quarter of 2021.

When it comes to tackling your own credit card debt, most people choose one of two ways to go about it: either the debt snowball or the debt avalanche methods. The difference between them comes down to which one will best motivate you to stay on track. The debt snowball is focused on giving you a psychological boost and the debt avalanche is all about the numbers.

There are pros and cons to both approaches but before we dive into the details, it’s important to understand why just making the minimum payments on a credit card will keep you trapped in a cycle of debt.

Credit Card Minimum Payments

Credit card minimum monthly payment formulas will vary from issuer to issuer but typically the minimum payment will be around 1% to 3% of the outstanding balance. Your credit card terms will say exactly how the minimum monthly payments are calculated. No matter what the exact number is, it’s low enough that the minimum payment on a $10,000 balance will only be a couple of hundred dollars.

An affordable minimum payment may make it more enticing to just pay the minimum balance each month. A March 2020 study by the National Federal for Credit Counseling® (NFCC) found that 62% of respondents had carried credit card debt in the 12 months prior to the survey. But this is an expensive habit that can lead to piling up the interest charges and turn a manageable balance into something of concern.

A $10,000 balance at 18% interest with a 3% minimum payment means a monthly minimum payment of $300. But just making a $300 minimum payment each month means it will take over 20 years to pay off the debt and you’ll have paid an additional $9,698.16 in interest.

Best Ways to Pay Off Credit Card Debt

Paying off your credit card debt is no easy feat for most. Other than paying off your debts all at once with one large lump sum payment, there are generally three ways to tackle a big balance:

  • Debt consolidation. This is where you take out a new loan or credit card, ideally at a lower rate of interest than what you’re currently paying and transfer your other existing high-interest debts to the new loan. For some, paying just one bill a month is more appealing and helps keep them on track then multiple bills at different times.
  • Debt snowball. This method has you paying off the card with the smallest balance first, then moving on to the next card with the smallest amount and so on. Some find this way gives them the psychological boost they need to stick to their debt repayment plan.
  • Debt avalanche. With this approach, you’ll make the biggest payments to the card that has the highest interest rate. This method may take you longer, but you’ll get out of debt paying less interest than the debt snowball method.

Debt Snowball

There’s no one perfect method for everyone when it comes to paying off debt. Let’s take a deeper dive into the advantages and disadvantages of using the debt snowball method to pay off credit card debt.

Pros and Cons of the Debt Snowball Method


  • The feeling of satisfaction when you pay off a card can provide the momentum to stick with the plan
  • Provides a psychological boost as you see your debt eliminated card by card
  • Each time you eliminate the need to make payment on one card, you’ll have more money to put towards the net card payment, creating a “snowball effect”


  • This method will take you longer than the debt avalanche method to pay down your debts
  • It’s also more expensive then the debt avalanche since you’ll pay more in interest over time

When to use the snowball method to pay off your debts?

The snowball method is likely best for someone who needs encouragement to stick with their debt repayment plan and who finds it motivating to see their debt paid off card by card.

Debt Avalanche

The debt avalanche may be the right fit for someone who is more disciplined and wants to pay off their debt via the fastest and least expensive route possible.

Pros and Cons of the Debt Avalanche Method


  • By paying off the card(s) with the highest interest rate first, you’ll save more money over time
  • You’ll also decrease your debt faster since the interest fees will decrease as your debt decreases


  • It may take longer to see significant progress
  • It might be harder to stay motivated

Debt Snowball vs. Debt Avalanche

It could be that your higher balance card also happens to be the one with the lower interest rate, to which we say, lucky you! In some cases, there might not be that much of a difference between the avalanche and snowball method. Use our credit card repayment calculator to see if there is a big discrepancy between these payment strategies and decide which one is right for you.

If You’re Drowning in High Interest Rates

If you’re committed to monthly payments but you’re overwhelmed by the amount of debt you’re facing, it may make sense to pursue other avenues for help if either the snowball or avalanche method aren’t enough.

Balance Transfer Credit Card

A balance transfer can help expedite paying off your debt by offering a promotional introductory 0% APR for a set amount of time, typically between six months to nearly two years. The way it works is you can transfer your high-interest debt to this card and continue making monthly payments. Since all of your payments will go solely towards the principal during the length of the offer, you’ll make faster headway than if you had to pay interest and principal.

One caveat is that these cards usually require a high credit score. If your credit isn’t great it might not be an available option. Also be aware that most balance transfer cards charge a balance transfer fee, which is typically between 3% to 5% of the amount being transferred and can add to your existing debt load.

Consolidate Credit Card Debt

Another option to help with your debt might be a debt consolidation loan. With this option, you can apply for an unsecured personal loan that’s repayable typically in three to seven years. These loans typically come with lower interest rates than credit cards and have fixed monthly repayment plans, otherwise known as installment plans.

Although a debt consolidation loan won’t immediately reduce the overall amount of debt you owe, it can help reduce the amount of interest you accumulate. If you qualify for a loan, it may also help boost your credit score since your overall credit utilization will be reduced too.

Bottom Line

If you’re looking to make headway on your credit card debt, a debt repayment plan is a crucial first step towards that goal. Whether the debt snowball or debt avalanche method will work best for you will depend on your personal circumstances and preferences.

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