How to Tackle Debt Using Avalanche vs. Snowball Methods (and What to Do About Buy Now, Pay Later Debt)

Two hands in beige mittens hold a heart-shaped snowball on a pink background

In a cost of living crisis, debt can sneak up on anyone. At Lone Shark, we see financial literacy and learning how to best repay debt as a form of self-care. While Buy Now Pay Later providers seem like a harmless way to spread out payments, it’s easy to lose track—and before you know it, you’re juggling multiple debts, interest charges, and any money you earn is going straight out of your bank accounts before you get a chance to enjoy it.

So, how do you actually get out of debt? There are a few proven strategies that can help, whether you’re managing BNPL balances, credit cards, loans, or all of the above. The two most popular approaches are the Debt Avalanche and the Debt Snowball, but there are other methods to consider too.

Please note this is not financial advice; you should do your own research and speak to a financial professional to best understand what actions suit your financial situation.

Let’s dive in.

1. The Debt Avalanche Method: Pay Off the Most Expensive Debts First

How it works:

You focus on repaying the debt with the highest interest rate first, while making minimum payments on everything else. Once that’s knocked out, you move to the next highest, and so on.

Where BNPL fits in:

While many BNPL services don’t charge interest if you make payments on time, some charge late fees or convert unpaid balances into higher-interest debt. If you’ve racked up BNPL late fees or rolled-over payments that now carry an interest rate, prioritize them like you would any other high-interest debt. They could easily belong near the top of your avalanche list.

Pros:

• Minimizes the total interest you pay over time

• Can get you out of debt faster (in terms of total dollars)

• Logical and efficient

Cons:

• Can feel like slow progress if your biggest debts are also the most expensive

• Requires discipline to stick with it, especially if BNPL payments are frequent and tempting

Best for:

People who are numbers-driven and want to minimize the true cost of their debt.

2. The Debt Snowball Method: Quick Wins for Motivation

How it works:

You start by paying off your smallest debt first, regardless of interest rate. Once it’s cleared, you move to the next smallest, building momentum as you go.

Where BNPL fits in:

Many BNPL debts are small, with balances split into 4 payments over a few weeks or months. But if you’ve missed payments and the balances are piling up, they may be the perfect candidates for the snowball method. Clearing a few lingering BNPL debts quickly can give you an immediate psychological boost and free up cash flow.

Pros:

• Easy to see progress quickly

• Builds confidence to stay on track

• Clears clutter from multiple small debts, like BNPL plans

Cons:

• May cost more in interest if you ignore higher-interest debts for a while

• Risk of focusing on small wins without addressing bigger financial issues

Best for:

People who need quick wins and are motivated by clearing debts fast—even small ones.

3.The Hybrid Method: Mix and Match to Fit Your Life

How it works:

You combine strategies to suit your financial and emotional needs. Maybe you snowball your small BNPL debts first for quick wins, then avalanche your way through bigger, high-interest loans.

Where BNPL fits in:

BNPL debts are often small and short-term, so using them to kick-start a snowball plan can help clear mental clutter. Afterward, focus on bigger, more expensive debts in avalanche style.

Pros:

• Flexibility to adapt as your situation changes

• Can balance motivation with financial efficiency

• Lets you tackle BNPL debt fast and build momentum

Cons:

• Requires some planning and tracking - see Lone Shark’s pay in 4 payment schedule tracking spreadsheet for support around this

• You must be consistent with your payments and accountable to yourself (is that a con? Idk!)

Best for:

People who want a personalized plan that addresses BNPL debts and traditional debts at the same time.

4. Debt Management Plan (DMP): Professional Help for Debt Overload

How it works:

A financial counsellor helps you roll unsecured debts into a structured repayment plan, often negotiating with creditors for better terms. While BNPL providers aren’t always included in DMPs, late BNPL debts that are handed over to collections may be eligible.

Where BNPL fits in:

If you’re overwhelmed by multiple BNPL debts, some that may have gone to collections, a DMP could help you take back control with expert guidance.

Pros:

• Professional help and accountability, support to meet your responsibilities

• A financial counsellor will have industry connections that allow you access to lower interest rates and fees on certain debts

• Structured repayment over time

Cons:

• Takes time (often 3-5 years)

• May impact your credit score temporarily

• Some providers don’t work with BNPL companies

Best for:

People whose BNPL or other forms of debts are spiraling, and who need outside help to get organized.

Don’t Let Debt Sneak Up on You

Buy Now, Pay Later services can be convenient, but if you’re not careful, they can contribute to financial stress just like any other loan. If you’re finding it hard to keep up with BNPL payments, or if you’ve missed some, it’s time to create a repayment strategy that works for you.

You can use Lone Shark’s Pay-in-4 Payment Schedule tracker to stay on top of short-term repayments, it is available for FREE when you sign up to receive emails on our homepage!

Whether you’re drawn to the Avalanche or Snowball method, or you need a hybrid approach, the most important step is starting. Get clear on what you owe, make a plan, and take action. Future you will thank you.