Choosing the right debt elimination strategy depends on whether you prioritize mathematical interest savings or behavioral psychology.
The Debt Avalanche (Mathematically Optimal)
Order debts strictly by highest interest rate (APR) down to lowest. Allocate all extra funds to the highest-rate debt while paying minimums on others. This minimizes the total dollar interest paid over time.
The Debt Snowball (Psychological Momentum)
Order debts strictly by smallest balance to largest, regardless of interest rate. Rapidly knocking out smaller accounts provides emotional wins and frees up monthly minimum payments to roll into subsequent debts.