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Debt Payoff Strategies
Snowball vs. avalanche — find the method that works for you and get debt-free.
💛 You can do this.
Debt feels overwhelming, but thousands of Canadians pay it off every year. The key is having a plan and sticking to it — even when it's hard.
Step 1: Know What You Owe
List every debt with these details:
| Debt | Balance | Interest Rate | Min. Payment |
|---|---|---|---|
| Credit Card A | $3,500 | 19.99% | $70 |
| Credit Card B | $1,200 | 22.99% | $25 |
| Car Loan | $8,000 | 5.5% | $250 |
| Student Loan | $15,000 | 4.5% | $175 |
Step 2: Choose Your Strategy
🔥 Avalanche Method
Pay off highest interest rate first.
- ✅ Saves the most money on interest
- ✅ Mathematically optimal
- ⚠️ Can feel slow if highest-rate debt is large
Best for: Math-minded people who want to minimize total cost.
⛄ Snowball Method
Pay off smallest balance first.
- ✅ Quick wins build motivation
- ✅ Psychologically powerful
- ⚠️ May pay slightly more interest overall
Best for: People who need motivation and quick wins to stay on track.
Step 3: Find Extra Money
- ⬥Cut one subscription you don't use ($10-50/month adds up!)
- ⬥Sell items you no longer need (Facebook Marketplace, Kijiji)
- ⬥Take on a side gig temporarily (even $200/month helps)
- ⬥Use tax refunds and bonuses for lump-sum payments
- ⬥Call your credit card company and ask for a lower rate (it works!)
Canadian Debt Help Resources
- ⬥Credit Counselling Canada: Free, non-profit counselling and debt management plans
- ⬥Consumer Proposal: A legal process to settle debt for less than you owe (talk to a Licensed Insolvency Trustee)
- ⬥Debt Consolidation Loan: Combine multiple debts into one lower-interest payment
- ⬥211: Dial 2-1-1 for local financial assistance programs
🍁 Canadian Pro Tip
If you have multiple credit card debts, consider a balance transfer card with a 0% introductory rate. Some Canadian cards offer 0% for 6-12 months — giving you breathing room to pay down the principal without interest piling up.