Avalanche with a tiny balance: clear it or stay?

What strict Avalanche order says to do

Avalanche ranks every debt by APR and sends all extra money to the highest one, regardless of how small or large any balance is. A tiny $150 balance at a modest rate gets only its minimum payment under strict Avalanche if a much larger, higher-rate balance exists, even though clearing the small one would take almost no time at all.

Why a small detour is usually inexpensive

Because a tiny balance is, by definition, small, diverting extra money to clear it first delays the bigger debt's extra payments by only a short amount of time, usually a month or less. The interest cost of that delay is typically small in dollar terms, even though it technically violates strict rate-based order.

When the detour costs more than it looks like

The math changes if the 'tiny' balance isn't actually that tiny relative to your extra payment pool, or if the rate gap between the two debts is extreme. A $1,500 balance isn't the same kind of detour as a $150 one, and a bigger rate gap means every month of delay on the larger debt costs more. Run the actual numbers before assuming any detour is automatically cheap.

Deciding for your own two debts

The choice comes down to comparing a small, known cost against the psychological benefit some people get from clearing an account entirely.

1. List your tiny balance and your highest-rate balance with their APRs and minimums.
2. Simulate strict Avalanche order: all extra money to the highest-rate debt from month one.
3. Simulate the detour: extra money clears the tiny balance first, then shifts to the highest-rate debt.
4. Compare total interest and total months between the two simulations.
5. If the detour's extra cost is small and clearing an account motivates you to keep going, it's a reasonable trade. If the cost is large, stick with strict order.

Common questions

Is this the same thing as the Snowball method?

It's related. Snowball always targets the smallest balance first regardless of rate. This is a one-time exception to Avalanche for a single tiny balance, while keeping rate-based order for everything else.

Does clearing a tiny balance first ever save money instead of costing it?

Rarely, since Avalanche is specifically the order that minimizes total interest. A detour almost always costs at least a small amount more, which is exactly what this article's example quantifies rather than assumes.

How small does a balance need to be before a detour is 'cheap'?

There's no fixed cutoff. Run the comparison with your own numbers, since the cost depends on the size of the small balance relative to your extra payment amount and the rate gap with your other debt.