The debt snowball method pays off debts from smallest balance to largest, regardless of interest rate. You pay minimums on all debts and put every extra pound toward the smallest balance. When it clears, that payment "snowballs" onto the next smallest. The method builds psychological momentum through quick wins rather than optimising for mathematics.

You've heard the advice: "Pay off your highest interest debt first. It's mathematically optimal."

And it is. The avalanche method saves money.

But here's what that advice ignores: you're not a spreadsheet.

The debt snowball method was popularised by Dave Ramsey in the US, but the psychology applies everywhere. When you're staring at multiple debts feeling overwhelmed, the fastest first win matters more than perfect maths.

This guide covers everything UK users need to know about the snowball method: how it works, when to use it, the real numbers, and how UK-specific debts affect the approach.

What Is the Debt Snowball Method?

The snowball method is a debt payoff strategy that prioritises psychological wins over mathematical optimisation.

The core principle: Pay off your smallest debt first, then roll that payment to your next smallest, creating a "snowball" of increasingly larger payments.

The Three Rules

List debts smallest to largest by balance (ignore interest rates)
Pay minimums on everything except the smallest
Put all extra money toward the smallest debt

When the smallest debt clears, take that entire payment amount and add it to the minimum on your next smallest debt. Repeat until all debts are cleared.

Why "Snowball"?

Imagine pushing a snowball down a hill. It starts small. As it rolls, it picks up more snow, growing larger. By the bottom, it's huge.

Your debt payments work the same way. Your first debt might only free up £25/month. But as debts clear, payments accumulate. By your last debt, you might be throwing £400/month at it—money that was spread across four different creditors at the start.

How the Snowball Method Works: Step-by-Step

Step 1: List Your Debts by Balance

Order from smallest to largest. Interest rates don't matter at this stage.

Example:

Store card: £380
Overdraft: £1,100
Credit card A: £2,400
Credit card B: £3,800

Step 2: Identify Your Minimum Payments

Note the minimum required for each debt:

Store card: £15/month
Overdraft: £45/month
Credit card A: £60/month
Credit card B: £95/month

Total minimums: £215/month

Step 3: Calculate Extra Money

Your total debt budget minus total minimums equals extra money.

If your budget is £350/month: £350 - £215 = £135 extra

Step 4: Attack Smallest First

All £135 extra goes to the store card (smallest debt).

Monthly payments become:

Store card: £15 + £135 = £150
Overdraft: £45
Credit card A: £60
Credit card B: £95

Step 5: Roll Over When Cleared

The £380 store card at £150/month clears in about 3 months.

Now that payment rolls to the overdraft:

Overdraft: £45 + £150 = £195
Credit card A: £60
Credit card B: £95

Step 6: Continue Rolling

The £1,100 overdraft at £195/month clears in about 6 more months.

Roll again:

Credit card A: £60 + £195 = £255
Credit card B: £95

Step 7: Final Push

As each debt clears, payments accelerate. Your last debt receives all previous payments combined.

Real UK Example: Complete Snowball Calculation

Your debts:

Debt	Balance	Rate	Type	Minimum
Store card	£500	29.9%	APR	£15
Overdraft	£1,500	39.9%	EAR	£50
Credit card A	£3,000	24.9%	APR	£75
Credit card B	£4,500	21.9%	APR	£115

Total debt: £9,500 Total minimums: £255/month Your budget: £400/month Extra for target debt: £145/month

Notice: The store card has the smallest balance (£500) but the overdraft has the highest interest rate (39.9% EAR). This is where snowball and avalanche diverge.

Snowball Order (Smallest First):

Store card (£500) — smallest balance
Overdraft (£1,500)
Credit card A (£3,000)
Credit card B (£4,500)

Timeline:

Months 1-3: Store card receives £160/month (£15 min + £145 extra)

Cleared: Month 3 ✓
First win achieved — account closed!

Months 4-12: Overdraft receives £210/month (£50 + £160 rolled)

Cleared: Month 12 ✓
Second win, momentum building

Months 13-26: Credit card A receives £285/month (£75 + £210 rolled)

Cleared: Month 26 ✓
Big debt falling

Months 27-38: Credit card B receives £400/month (entire budget)

Cleared: Month 38 ✓
Debt-free: February 2029

Total Interest Paid (Snowball): £2,340

Calculate your specific snowball timeline →

The Psychology Behind Snowball

The snowball method isn't about maths. It's about behaviour.

Quick Wins Build Momentum

Clearing your first debt in 3 months feels different from waiting 9 months to see any progress. That early win proves the system works. It proves you can do this.

Fewer Accounts = Less Overwhelm

Four debts feels like chaos. Three feels slightly better. Two feels manageable. One feels almost finished.

Each cleared debt simplifies your financial life. Fewer logins to check. Fewer statements to read. Fewer minimum payments to track.

The Research

A 2016 study in the Harvard Business Review analysed 6,000 debt repayment strategies. The finding: people who concentrated payments on single accounts rather than spreading them were more likely to eliminate debt entirely.

It wasn't about interest rates. It was about the psychological boost of progress.

Why Avalanche Fails for Many People

The avalanche method (highest interest first) is mathematically optimal. But if your highest-rate debt is also your largest, you might wait 18 months before clearing anything.

Eighteen months with no visible wins. No accounts closed. No sense of progress.

Most people quit.

The snowball method trades potential savings for actual completion. £150 more in interest doesn't matter if the alternative is abandoning your plan at month 8.

Snowball vs Avalanche: The Real Numbers

Let's compare for the same debts:

Strategy	First Win	Debt-Free	Total Interest	Interest Diff
Avalanche	Month 9 (overdraft)	December 2028	£2,087	—
Snowball	Month 3 (store card)	February 2029	£2,340	+£253

The trade-off is clear:

Snowball gets first win 6 months earlier (Month 3 vs Month 9)
Avalanche saves £253 total and finishes 2 months sooner
Snowball costs £6.66/month more over 38 months

Which matters more to you: seeing progress in 3 months, or saving £253 over 3 years?

When the Gap Is Larger

If your highest-rate debt is also your largest, the gap widens. Snowball might cost £500+ more.

When the Gap Is Smaller

If rates are similar across debts, the gap shrinks dramatically. Sometimes it's under £50 total difference.

If your highest-rate debt is also your smallest, avalanche and snowball converge—you pay the same thing first anyway.

The only way to know your specific gap: calculate it with your actual numbers →

When Snowball Is the Right Choice

You Need Early Wins

If you've tried to pay off debt before and quit, snowball gives you faster proof that it's working.

You Have Many Small Debts

Four store cards, two overdrafts, and a credit card? Snowball simplifies fast. Eliminating accounts feels like progress.

You're Overwhelmed

When debt feels crushing, getting a win—any win—matters more than optimisation.

Rates Are Similar

If your debts are all 20-30% APR, the mathematical difference between strategies is minimal. Go with what motivates you.

You're Starting Fresh

Never done structured debt payoff? Snowball teaches the system with quick results.

When Snowball Isn't Right

One Debt Has a Much Higher Rate

If you have a 40% store card and everything else is 10%, pay the store card first regardless of balance. The rate difference is too significant.

You're Mathematically Driven

Some people find motivation in optimisation. If "saving £263" motivates you more than "clearing this debt sooner," use avalanche.

You Only Have 1-2 Debts

Snowball's benefits come from clearing multiple accounts. With just one or two debts, the psychology difference is minimal.

You Have a 0% Deal Ending Soon

If a 0% balance transfer reverts to 24.9% in 6 months, that should probably be your priority regardless of balance.

UK-Specific Considerations

EAR vs APR

UK overdrafts use EAR. Credit cards use APR. When ordering by balance (snowball), this doesn't change anything—you're ignoring rates.

But when comparing snowball results to avalanche, you need a calculator that handles both rate types correctly.

UK Overdraft Rates

Most UK overdrafts are 35-40% EAR since the FCA's 2020 pricing changes. This is roughly equivalent to credit card rates, so the avalanche/snowball decision often comes down to balance, not rate.

Minimum Payment Calculations

UK credit cards typically calculate minimums as 1-3% of balance or a fixed amount (£5-25), whichever is higher. This affects how long each debt takes to clear if you're only paying minimums on non-target debts.

How to Start Your Snowball Today

1. List Your Debts

Open your banking apps. Write down:

Each debt name
Current balance
Interest rate (APR or EAR)
Minimum payment

2. Order by Balance

Sort smallest to largest. This is your snowball order.

3. Calculate Your Extra

Total monthly budget - total minimums = extra for smallest debt.

4. Set Up Payments

Minimums on everything except smallest
All extra on smallest debt
Set standing orders/direct debits to automate

5. Track Monthly

Check balances monthly. Watch your target debt shrink. Celebrate when it hits zero.

6. Roll Over and Repeat

When the first debt clears, add its payment to your next target. Continue until debt-free.

Calculate Your Snowball

See exactly how snowball works with your specific debts.

Open DebtRiot →

Enter your UK debts (handles EAR + APR)
Compare snowball to avalanche
See your debt-free date
Know the exact interest difference

Free. No signup. Plan ready in minutes.

Frequently Asked Questions

The debt snowball pays debts smallest to largest by balance, regardless of interest rate. You pay minimums on all debts and put extra money toward the smallest. When it clears, roll that payment to the next smallest. The method builds momentum through quick wins.
Yes. The snowball method works for UK debts including overdrafts, credit cards, and store cards. UK users should use a calculator that handles EAR rates for overdrafts correctly when comparing strategies.
For typical UK debt scenarios, snowball costs £50-300 more in total interest than avalanche over 2-3 years. The exact difference depends on your specific balances and rates. Calculate your exact difference →
Research shows people using snowball are more likely to eliminate debt completely because early wins build motivation. The best method is the one you'll actually follow through on—not the one that's mathematically perfect.
Use snowball if you need quick wins, feel overwhelmed, or have many small debts. Use avalanche if you're motivated by optimisation and can wait longer for first win. Compare both with your numbers →
Yes. Many people start snowball for momentum, then switch to avalanche later. This hybrid approach captures early wins and later efficiency.

DebtRiot is a calculation tool, not financial advice. For debt help: StepChange, National Debtline or Citizens Advice.

Debt Snowball Method UK: The Complete Guide to Building Momentum