If you're carrying balances across multiple credit cards, you're probably wondering which one to pay off first — and whether there's actually a right answer.
There is. Sort of.
The mathematically optimal approach is to pay off the card with the highest interest rate first while making minimum payments on the others. This is called the avalanche method, and it saves you the most money over time. But there's another approach — the snowball method — where you pay off the smallest balance first, then roll that payment into the next smallest. It costs slightly more in interest, but many people find it easier to stick with because they see progress faster.
Neither method is wrong. The best way to pay off multiple credit cards is whichever method you'll actually follow through on. If you've tried tackling debt before and stalled, that context matters more than the interest calculation.
How does paying off the highest interest card first actually work?
How does paying off the highest interest card first actually work?
The avalanche method targets your most expensive debt first. You list all your credit cards by interest rate, highest to lowest. Every month, you make the minimum payment on every card except the one at the top of the list — that one gets every extra dollar you can put toward debt. Once it's cleared, you move to the card with the next-highest rate and repeat. This approach minimises the total interest you pay because you're eliminating the debt that's costing you the most each month. For example, if you have a card at 22% and another at 17%, every dollar you put toward the 22% card saves you more than putting it toward the 17% one. The method is mathematically efficient, but it requires patience if your highest-rate card also has the largest balance — you might be paying on it for months before you see it cleared.
What if my highest interest card also has the biggest balance?
This is where the avalanche method feels hardest. If your 23% card has a $8,000 balance and your 19% card has $1,200, paying off that $8,000 first could take six months or more depending on how much extra you can put toward it each month. That's a long time without a visible win. Some people handle this fine — they trust the maths and keep going. Others lose momentum and stop putting extra toward debt altogether. If you think you're in the second group, consider a hybrid approach: clear one or two small balances first to free up mental space, then switch to avalanche for the remainder. You'll pay slightly more in interest, but you'll also be more likely to finish.
How does the snowball method compare?
The snowball method ignores interest rates and focuses purely on balance size. You pay off your smallest debt first, regardless of the rate. Once it's gone, you take the payment you were making on that card and add it to the payment on your next-smallest balance. The psychological benefit is real: clearing a card completely — even a small one — creates momentum. You see an account hit zero, and that feels like progress in a way that watching a large balance slowly shrink does not. Research on debt repayment behaviour shows that people using snowball are more likely to stick with the plan long-term, even though they pay more in interest overall. For many Australians juggling multiple credit cards, the difference in total interest between snowball and avalanche might be a few hundred dollars — meaningful, but not life-changing if snowball is what keeps you consistent.
Can I switch methods halfway through?
Yes, and many people do. You might start with snowball to clear two or three small balances quickly, then switch to avalanche once you've built confidence and freed up some monthly cash flow. Or you might start with avalanche and realise after a few months that you need a win, so you pivot to knock out a smaller card. There's no rule that says you have to commit to one method from start to finish. The only thing that matters is that you're consistently putting extra money toward debt and not accumulating new balances. If changing approach mid-way keeps you engaged, do it.
What if I can barely afford the minimum payments right now?
If you're only just covering minimums across all your cards, neither avalanche nor snowball will work yet — because both assume you have extra money to put toward one card while maintaining minimums on the others. In this situation, the priority is to create even a small amount of breathing room. That might mean cutting one discretionary expense temporarily, picking up a side shift, or selling something you no longer need. Even an extra $50 a fortnight changes the equation. If genuinely no extra money is available, contact your card providers directly. Many Australian banks have hardship programs that can reduce your interest rate temporarily or pause interest entirely while you catch up. This is not advertised widely, but it exists — and it's designed for situations like this.
Should I consolidate my credit card debt into a personal loan?
Consolidation can help if the loan interest rate is genuinely lower than your credit card rates and if you're confident you won't rack up the cards again once they're cleared. A personal loan at 12% is cheaper than three credit cards averaging 20%. But consolidation doesn't fix the behaviour that created the debt — it just restructures it. If you consolidate and then continue using the cards for everyday spending, you'll end up with both the loan and new credit card balances. That's worse than where you started. Consolidation works when it's part of a broader plan that includes changing how you use credit. If you're not sure you can do that yet, focus on paying down the cards using avalanche or snowball first.
Do I need to close the cards as I pay them off?
Not necessarily. Closing a credit card reduces your total available credit, which can temporarily affect your credit score — especially if your other cards are close to their limits. But keeping cards open only makes sense if you trust yourself not to use them. If having access to an empty card feels like permission to spend, close it. Your credit score will recover. If you can leave the card open and simply not use it, that's fine too. Some people cut up the physical card but leave the account active. The right choice depends on your relationship with credit and whether having unused limit available feels like safety or temptation.
The mistake most people make when paying off multiple debts
The biggest error isn't choosing the wrong method. It's spreading extra payments too thin.
When you're juggling multiple credit cards, it's tempting to put a little extra toward each one every month. It feels fair. It feels balanced. But mathematically, it's the slowest way to make progress.
Here's why: credit card interest is calculated on your remaining balance. When you split your extra money across three cards, none of them drop fast enough to meaningfully reduce the interest you're being charged. You're making tiny dents everywhere instead of eliminating one source of interest completely.
Compare two scenarios. You have three cards with balances of $3,000, $5,000, and $2,000. You have $300 extra each month after minimums. If you split that $300 evenly — $100 to each card — all three balances drop slowly. If you put the entire $300 toward one card while paying minimums on the others, one card is cleared in under a year. Once it's gone, you redirect its minimum payment plus your $300 toward the next card. Momentum builds.
The lesson: pick one card. Put everything extra toward it. Ignore the others beyond their minimums until the first one is done.
What paying off credit card debt in Australia actually looks like month to month
Let's make this concrete. Say you have three credit cards:
Card A: $6,500 at 21.99% Card B: $2,800 at 19.49% Card C: $1,100 at 22.99%
Your minimum payments total about $280 a month. You've found $400 in your budget to put toward debt each month — $280 for minimums, $120 extra.
If you use avalanche, you target Card C first because it has the highest rate. Your $120 extra goes there every month. Card C is cleared in about 10 months. Then you take the $50 minimum you were paying on Card C and add it to your $120 extra — now you have $170 going to Card A (the next-highest rate). Card A is cleared in roughly 18 more months. Then everything rolls into Card B, which clears in under a year after that.
If you use snowball, you target Card C first because it has the smallest balance. Same $120 extra. Card C clears in about 10 months. Then you roll that payment into Card B (next smallest), which clears faster than it would under avalanche because you're directing more money at it sooner. Card A takes slightly longer at the end, but you've had two wins before tackling it.
The interest difference between these two approaches in this scenario is around $350 over the full repayment period. That's real money. But it's also less than one month's rent for most Australians. If snowball's early wins keep you consistent, the $350 is worth it.
Paying off multiple credit cards comes down to focus and consistency. Whether you choose avalanche or snowball, the method works when you commit every extra dollar to one card at a time and don't split your effort. The maths matters, but so does your ability to stick with the plan for months. Pick the approach that fits how you actually work, not the one that sounds best on paper.
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