The Debt Avalanche Method

The avalanche method orders your debts by interest rate, highest to lowest, regardless of balance size. You pay minimums on everything else and put every extra dollar toward whichever debt is charging you the most.

How it works, step by step

1. List every debt from highest APR to lowest.
2. Keep paying the minimum on all of them.
3. Put every spare dollar toward the highest-rate debt until it's paid off.
4. Roll that full payment into the next-highest-rate debt.
5. Repeat until everything is cleared.

Why it saves more money

Because you're always attacking the debt that's growing fastest, less of your total payment gets eaten by interest along the way. Compared to the snowball method on the same set of debts, avalanche typically finishes with a lower total interest paid — sometimes by hundreds or thousands of dollars, depending on how spread out your rates are.

The trade-off

The highest-rate debt isn't always the smallest one. If your highest-APR balance is also your largest, it can take a while before you clear any single account — which is where some people lose steam compared to the snowball method's early wins.

When it's the right call

• You're motivated by the math, not by visible milestones.
• Your interest rates vary a lot between debts (e.g. a 26% store card next to a 7% personal loan).
• You want to minimize what you pay the bank, full stop.

Same example, avalanche order

Debt	Balance	APR
Store card	$600	26%
Credit card B	$5,800	22%
Credit card A	$2,400	19%

Avalanche order: Store card → Credit card B → Credit card A. The store card still goes first here since it also happens to have the highest rate — but notice credit card B (the bigger balance) jumps ahead of credit card A, which is the opposite of the snowball order.