We ran both methods on the same four hypothetical debts and checked the results two ways, so you can see the price of each choice in dollars.

The short answer

The debt avalanche (highest interest rate first) almost always costs less than the debt snowball (smallest balance first). In our $30,500 example, the avalanche saved $684 in interest, and both plans finished in 30 months. The snowball paid off its first debt in month 7 instead of month 10.

The Financial Consumer Agency of Canada (FCAC) describes both strategies on its paying back your debt page. It says paying the highest interest first means you pay less interest, and that the smallest-balance approach may cost you more over time. What it does not tell you is how much more. That depends on your rates, and on one number that matters more than either method: how much extra you pay each month.

How each method works

Both methods start the same way. You list every debt, keep paying the minimum on all of them, and put every extra dollar on one target debt. When that debt is gone, its minimum payment rolls into the next target. The only difference is the order.

• Avalanche: list debts from the highest interest rate to the lowest. The extra money goes to the highest rate first.
• Snowball: list debts from the smallest balance to the largest. The extra money goes to the smallest balance first.

If sorting by rate and sorting by balance give the same order, the two methods are identical. The cost gap only appears when a small balance carries a low rate, such as a small line of credit next to a large credit card.

The example: four debts, $1,225 a month

Here is a hypothetical household carrying $30,500 across four debts. The rates are illustrative, not quotes from any lender. The minimum payments add up to $825 a month, and the household can afford $400 more, for a total of $1,225.

Assumptions: interest charged monthly at the annual rate divided by 12, payments made at month end, and minimums held at the same dollar amount until each debt is paid. Your lenders may calculate interest and set minimum payments differently.

The avalanche order is the store card, the credit card, the line of credit, then the car loan. The snowball order is the line of credit, the store card, the credit card, then the car loan. The car loan is last either way, so the whole difference comes from where the line of credit sits.

What each plan costs

Three things stand out. First, the avalanche saved $684 over the snowball, and neither finished sooner. Second, simply rolling a paid-off minimum into the next debt cut 21 months off the minimums-only plan without any new money. Third, the $400 extra did the heavy lifting: it took the plan from 73 months and $13,200 in interest down to 30 months and roughly $5,200 to $5,900.

The motivation trade-off, by month

The snowball is built for momentum. It cleared the line of credit in month 7. The avalanche did not clear anything until the store card in month 10. After that, the avalanche pulls ahead on the expensive debts. It cleared the store card five months sooner (month 10 against month 15) and the regular credit card three months sooner (month 21 against month 24).

So the snowball buys you one early win, three months ahead of the avalanche, for $684 in this example. Whether that is worth it is a personal call. The FCAC frames it the same way: the choice depends on your financial goals and motivation.

The extra payment matters more than the method

We re-ran both methods with different extra payments. The method gap shrinks as you pay more, because there is less time for interest to build up. The gap between paying $200 and $400 extra is far bigger than the gap between the methods.

Going from $200 to $400 extra under the avalanche cut total interest from $7,057 to $5,218, a saving of $1,839. Switching methods at $400 extra saved $684. If you are torn between methods, finding another $100 or $200 a month will usually do more for you than the order.

When the gap gets bigger or smaller

You can estimate your own gap without a spreadsheet by asking three questions.

• How far apart are the rates? In our example, the snowball paid a 10.5% line of credit first while a 21.99% card waited. A wider spread, such as a small 6% loan ahead of a large 29.99% card, makes the snowball more expensive.
• How big is the high-rate debt that waits? A large balance at a high rate left waiting for months is where the cost builds.
• How long does the small debt take to clear? If the small balance disappears in two or three months, the detour is short and cheap.

If one of your debts carries a very high rate, the avalanche case gets stronger. For context, the Criminal Code defines the criminal rate as an annual percentage rate that exceeds 35 per cent on the credit advanced. Any debt at a rate approaching that level should usually be first in line.

Should you consolidate instead?

Consolidation combines several debts into one, such as a loan or a line of credit. The FCAC says on its debt consolidation page that moving high-interest debt to a lower-interest product may save you money, but a longer repayment period can cost more in interest over time. It also warns that you may only qualify for a product with a higher rate than your current debts, in which case consolidation will likely increase your debt.

A balance transfer is another form of consolidation. The FCAC notes you usually pay a fee to transfer a balance, so check whether the fee and the rate after the promotional period still beat the avalanche on your current cards. Our balance transfer guide works through that fee math.

How to start this month

1. Deal with anything past due. The FCAC suggests considering past due accounts first. Our missed payment guide explains what a late credit card payment can trigger.
2. List every debt. Write down the balance, the annual interest rate and the minimum payment. Your latest statement or loan agreement should show the rate.
3. Set up every minimum as an automatic payment. The FCAC says you need to keep making the minimum payments on all your debts with either strategy.
4. Pick a number for your extra payment. Treat it like a bill. In our example, every extra $100 a month mattered more than the method.
5. Choose the order. Sort by rate for the avalanche or by balance for the snowball, and send the extra money to the top of the list.
6. Roll payments forward. When a debt is gone, add its old minimum to the next target. Stop using the cards you are paying off.

If the minimums alone are more than you can pay, a credit counsellor may help. The FCAC says on its credit counselling page that a debt management plan can combine your debts into one monthly payment, and in some cases you may not have to keep paying interest. It notes you will usually have to repay 100% of your debts, and that these plans usually do not cover secured debts like mortgages and car loans.

If you are relying on a high-cost product to cover the gap, such as a cash advance or payday loan, see what those really cost in our guides to credit card cash advances and payday loans.

Frequently asked questions

• Sources, checked November 1, 2026: FCAC: Paying back your debt (modified 2025-10-14); FCAC: Debt consolidation (modified 2025-10-14); FCAC: Getting help from a credit counsellor (modified 2025-10-14); Criminal Code, section 347, current to 2026-09-30.
• Method: All scenarios were simulated month by month in Python using the hypothetical debts above. Results were checked with a second, independent implementation using exact decimal arithmetic, which matched to the cent, and with the closed-form loan payoff formula for each debt on minimum payments only (73, 52, 50 and 40 months).

Important: This guide is general information, not financial or legal advice. The example uses hypothetical balances and rates, and your lender’s interest calculation and minimum payment rules will differ. Gizly is not paid by any lender mentioned here. See our affiliate disclosure.