What’s the Best Way to Pay Off Debt?

1. Debt Snowball Method

The debt snowball method is a debt payoff approach that prioritizes your smallest balances first.

With this strategy, you'll make the minimum payment on every debt you owe each month. Then take any extra money you can put toward your debt and add it to the minimum payment on your smallest balance. Once you pay off that balance, roll the full amount you were paying on it into the next smallest balance. You'll then repeat the process until all your debt is paid off.

Who It's Best For

The debt snowball method works best for people who struggle with motivation. Because you're targeting small balances first, you can eliminate individual debts relatively quickly and see real progress early on. Those early wins can keep you going.

The snowball method is also a solid option if your credit scores aren't high enough to qualify for a low-rate consolidation loan or a 0% intro APR balance transfer card.

2. Debt Avalanche Method

The debt avalanche method follows the same structure as the snowball approach, but targets your highest-interest debt first instead of your smallest balance.

You'll make minimum payments on all your accounts, then put any extra dollars toward the debt with the highest interest rate. Once that balance is gone, shift payments to the next highest-rate account and continue making payments until you're debt-free.

Who It's Best For

This approach is ideal if your top priority is to minimize the total interest you pay. It's mathematically the most efficient approach, and it could save you a meaningful amount of money compared to the snowball method, especially if you're carrying large, high-rate balances.

The trade-off is that your highest-interest debt may also be one of your larger balances, which means it can take longer to see your first payoff milestone. You'll need to be disciplined enough to stick with the plan even without those early wins.

3. Debt Consolidation

Debt consolidation means combining multiple debts into a single new debt, ideally at a lower interest rate and with one monthly payment instead of several.

The two most common tools for this are debt consolidation loans and balance transfer credit cards. A personal loan gives you a fixed rate and a set repayment timeline. In contrast, a balance transfer card lets you move existing credit card balances onto a new card, often with a 0% intro APR promotional period that can last up to 21 months.

Both options may come with upfront fees—some personal loans charge an origination fee, and most balance transfer cards charge a balance transfer fee—so factor those into your comparison.

Who It's Best For

This approach works best if you have a good credit—a FICO^® Score^Θ of 670 or higher. Good credit is usually required to get approved for a balance transfer card, and it gives you the best shot at a low rate on a consolidation loan.

Debt consolidation is especially effective for people juggling multiple high-interest balances who want to simplify repayment and reduce what they're spending on interest each month.

Be aware: Paying off credit card balances through consolidation frees up available credit on those cards. Without discipline, it's easy to run those balances back up and end up in a worse position.

Frequently Asked Questions

The Bottom Line

The best debt payoff strategy is the one you'll stick with. Whether you're drawn to the quick wins of the snowball method, the math of the avalanche or the simplicity of consolidation, all three can help you make meaningful progress—as long as you commit to the plan.

Before you decide, review your credit report to confirm exactly what you owe. Experian's free credit monitoring also gives you access to your FICO^® Score and real-time alerts when changes are made to your report, so you can track how your payoff efforts are affecting your credit along the way.