Debt snowball vs debt avalanche, explained like an RPG: three debt bosses, one damage budget. Avalanche hits the boss with the strongest regen first, snowball kills the smallest first.
The math: $700 a month toward three debts. Every debt gets its minimum payment, the rest goes to one target, and when a debt is paid off its payment rolls into the next one.
• Medical bill: $1,200 at 0%, minimum $50.
• Credit card: $5,000 at 24% APR, minimum $150.
• Personal loan: $7,000 at 12% APR, minimum $200.
• Avalanche (highest rate first): first debt gone in month 13, debt-free in 22 months, $1,752 of interest.
• Snowball (smallest balance first): first debt gone in month 4, debt-free in 22 months, $2,013 of interest.
Interest is charged monthly at APR/12. Minimum payments are fixed amounts for simplicity.
