credit card payoff order
The sequence in which multiple credit cards are targeted for payoff — avalanche targets highest rate, snowball targets smallest balance.
Example
“Her credit card payoff order used the avalanche method targeting the 24% card before the 18% card.”
Memory Tip
ORDER matters — which card first depends on your strategy and psychology.
Why It Matters
Choosing the right payoff order can save thousands in interest and help you become debt-free faster. The strategy you select directly impacts your monthly cash flow, motivation level, and total interest paid over time, making it a critical decision for anyone managing multiple credit cards.
Common Misconception
Many people assume that paying off cards in any order produces the same result, but the avalanche method (highest interest rate first) typically saves more money while the snowball method (smallest balance first) provides psychological wins that keep people motivated to continue paying down debt.
In Practice
Imagine you have three cards: Card A at 22% APR with a 5000 dollar balance, Card B at 18% APR with a 3000 dollar balance, and Card C at 15% APR with a 2000 dollar balance. Using the avalanche method, you would attack Card A first to minimize interest charges, while the snowball method would target Card C first to achieve a quick win and free up that monthly payment toward the other cards.
Etymology
Modern debt management decision — choosing the most effective payoff sequence.
Common Misspellings
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Related Terms
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