Snowball or avalanche? If you’ve ever searched for the best way to pay off debt in Canada, you’ve met both.
The snowball means paying the minimum on everything and putting every spare dollar on your smallest balance first. The avalanche means putting the extra on the highest interest rate first, which usually costs you the least interest. The best one is whichever you’ll actually stick with. Either way, never skip a minimum payment, and if you’re paying down credit cards, you’ll usually see your credit score respond faster than with a fixed-payment loan.
Here’s the part that rarely gets said: both methods only work if there’s money left after the minimums. If your balances barely move even though you keep paying, interest is doing most of the work against you. That isn’t a character flaw, it’s math, and it’s a sign to compare bigger options like consolidation, a debt management plan, a consumer proposal or a negotiated settlement. There may be a smarter strategy than paying every balance in full over many years.
Save this for the next time you sit down with your statements, and send it to someone who’s working hard on their debt.
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