Case Study: 'Alex' Cleared 4 Cards with Snowball
Hypothetical case study showing how targeting small balance debts first built momentum and cleared 4 accounts in 18 months.
While the Avalanche method minimizes total interest mathematically, behavioral research shows that many individuals choose the Debt Snowball method because of the psychological momentum generated by eliminating small accounts quickly.
In this educational breakdown, we follow a hypothetical persona named "Alex" who owes money across four separate accounts and uses an extra budget of £175 per month to execute the Debt Snowball strategy.
1. Alex's Initial Debt Inventory
Here is Alex's hypothetical debt portfolio at the start of the plan:
| Account Name | Balance Owed | APR | Minimum Monthly Payment |
|---|---|---|---|
| Card 1 (Electronics Store) | £350 | 24.9% | £25 |
| Card 2 (Fashion Retailer) | £750 | 28.9% | £35 |
| Card 3 (Credit Card) | £2,100 | 18.9% | £65 |
| Card 4 (Personal Loan) | £4,200 | 11.5% | £110 |
| Total | £7,400 | N/A | £235 / month |
Total monthly budget: £235 (Minimums) + £175 (Extra Allocation) = £410 / month.
2. Step-by-Step Snowball Execution
Under the Debt Snowball method, accounts are prioritized strictly by smallest principal balance first, regardless of APR:
Target 1: Card 1 (£350 balance)
- Monthly Allocation: £25 (min) + £175 (extra) = £200/month directed at Card 1.
- Cards 2, 3, and 4 receive their required minimums (£35, £65, and £110).
- Outcome: Card 1 is completely cleared in Month 2.
- Psychological Impact: 1 out of 4 accounts is eliminated in just 60 days.
Target 2: Card 2 (£750 balance)
- With Card 1 paid off, its £200 payment rolls into Card 2.
- Monthly Allocation: £35 (min) + £200 (rolled payment) = £235/month directed at Card 2.
- Outcome: Card 2 is completely cleared in Month 5.
- Psychological Impact: Half of all debt accounts are cleared in under 5 months.
Target 3: Card 3 (£2,100 balance)
- With Cards 1 & 2 paid off, all accumulated payment power rolls into Card 3.
- Monthly Allocation: £65 (min) + £235 (rolled payment) = £300/month directed at Card 3.
- Outcome: Card 3 is completely cleared in Month 11.
Target 4: Card 4 (£4,200 balance)
- With Cards 1, 2, and 3 paid off, the full £410 monthly budget is directed at Card 4.
- Outcome: Card 4 is completely cleared in Month 18.
3. Repayment Method Comparison
Here is how Alex's numbers compare across strategies:
| Strategy | Total Time to £0 | Accounts Cleared by Month 6 | Total Interest Paid |
|---|---|---|---|
| Minimums Only | 11 Years, 8 Months | 0 Accounts | £3,650 |
| Debt Snowball Method | 18 Months | 2 Accounts | £1,120 |
| Debt Avalanche Method | 17 Months | 1 Account | £1,010 |
4. Key Insights from the Scenario
- Fast Account Elimination: Under the Snowball method, Alex cleared two accounts within the first 5 months, reducing monthly admin and mental overhead quickly.
- Small Interest Variance: The Avalanche method would have saved £110 more in interest and finished 1 month earlier. However, the Snowball provided faster early milestones.
- Consistency Matters Most: The biggest mathematical gain came from maintaining the fixed £410 monthly allocation rather than relying on minimum payments.
Financial Disclaimer: Content on debtclear.me is provided for educational and informational purposes only and should not be construed as professional financial, legal, or tax advice. The calculations and scenarios presented are estimates based on user inputs and mathematical formulas. For personalized advice tailored to your specific financial situation, please consult a qualified financial advisor or certified credit counselor.
Ready to See the Math on Your Own Numbers?
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