What Is the Debt Snowball Method?
The debt snowball method pays off debts in order of smallest balance first, building momentum through early wins.
Under the snowball method, you make minimum payments on every debt except the one with the smallest balance. Every extra dollar goes there until it is gone, then rolls to the next-smallest balance.
The snowball method is not mathematically optimal. It typically costs somewhat more in total interest than the avalanche method. What it offers instead is momentum: eliminating an entire account, not just shrinking a number, tends to keep people motivated through a long payoff process.
Research on debt payoff behavior backs this up. People who focus on eliminating individual accounts are more likely to finish the full payoff than people focused on the aggregate balance.