That is the average interest rate that Americans get slapped with on their credit card debt, according to CreditCards.com.

Interest from any sort of debt is the quicksand of personal finance. The deeper you let yourself sink into it, the harder it is to get yourself out.

Looking for the best way to stop before you’re in over your head? Try tapping into the power of a debt avalanche.


  • Gather all of your statements and see what you owe now
  • Download our free debt avalanche printable (look for the green box)
  • Create a debt avalanche plan to snuff out your interest and debt

In this post, you’ll learn:

  • What is the debt avalanche method
  • How it compares to a debt snowball
  • A step-by-step guide on how to implement a debt avalanche

This post may contain affiliate links. See disclosure for more details.

everything you need to know about debt avalanche


What is a debt avalanche?

The debt avalanche is a method of paying off debt that focuses on saving money on interest.

Whenever you repay debt, some of your payment goes towards the balance you owe (the principal) while the rest it goes to the lender as interest payments, to compensate them for letting you borrow their money.

The more money you are paying in interest, the less is going towards reducing your debt. Here is a quick example to demonstrate:

Table 1: $100 payments, with $10 going to interest

Payment amountInterestPrincipalDebt balance

Table 2: $100 payments, with $25 going to interest

Payment amountInterestPrincipalDebt balance

As you can see, if more of your money is going to interest, your debt balance goes down a lot more slowly. It will ultimately take you longer to get rid of all your debt, which is why the avalanche method is all about paying as little interest as you can.

Debt snowball vs avalanche

Most financial experts agree that from a money-saving perspective, the debt avalanche is definitely the better way to pay off debt.

That’s because the debt avalanche makes the best use of your money by giving as little of it away in interest as possible.

But how does it compare to the debt snowball method, another repayment strategy that’s wildly popular with Dave Ramsey’s legion of fans?

Some people claim that the debt snowball method is easier to implement, but we don’t think that is true. Both are pretty much identical in terms of set-up and execution: one just has you paying your debts in order of the balance size, while the other has you paying them off in order by interest rate.

But it’s important to also keep in mind that debt reduction is not just about numbers. It’s about what works for you.

For some people, watching their statement balance go down isn’t enough motivation. They want to see bigger, bolder results or else they won’t feel like they’re getting anywhere and give up.

If that describes you to a tee, you might find that it’s better to pay off your smallest debts first by using the debt snowball method, to keep your money mojo up.

To us, the #1 factor is that you want to keep going, so when it comes to the debt snowball vs avalanche debate, pick whatever is best for YOU.

If using a different method other than the debt avalanche gets better results for YOU, then just do it. Even if it costs you more in interest payments, it still won’t be as pricey as NOT making any strides in paying off your debt.

Free debt avalanche printable

Looking for a free printable worksheet to help you organize your debt avalanche efforts? We’ve got you covered!

Share this post, then click the button below to download your free debt avalanche tracker spreadsheet to crush that debt.

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How to use the debt avalanche method

Setting off your own debt avalanche is pretty simple to do:

Step 1: List out all of your debts, sorted by the interest rate you are being charged from lowest to highest.

how does debt avalanche work tutorial - step 1

Step 2: Mark down the minimum payment owed for each of the debts.

how does debt avalanche work tutorial - step 2

Step 3: Each month, pay at least the minimum payment due on each. If you have any extra money beyond that, always put it towards the debt charging you the highest interest rate.

how does debt avalanche work tutorial - step 3

Step 4: As you pay off debts, the money that would have gone towards those minimum payments are now freed up. Instead of pocketing that cash, apply it towards whichever debt you still have that has the highest interest rate.

how does debt avalanche work tutorial - step 4

Best debt avalanche calculator

As easy as the debt avalanche method is, you can do even less legwork by using an online debt calculator. Using a debt calculator tool can be especially helpful for anyone who loves charts, graphs, or paydown tables.

Of the many debt repayment apps and sites we’ve seen, no one has come close to our favorite: Undebt.it.

undebt it homepage - the free tool that gets you out of debt

Undebt.it is an ultra user-friendly, 100% free debt calculator created by a fellow debtor who couldn’t find the comprehensive tool he wanted when he was trying to tackle his own debt. So, he created it himself!

The great thing about Undebt.it is that you can choose between a version that requires zero sign-up, or you can elect to set up a free account to unlock even more handy free features.

Here are some of the basics:

  • No sign up required
  • FREE (no strings attached!)
  • No sign-up required (although there are many great features if you do sign up for a free account)
  • Choose from multiple repayment strategies:
    • Debt snowball (smallest balance first)
    • Debt avalanche (highest interest rate first)
    • And other methods!
  • Add unlimited debt accounts
  • View projected payoff date & total interest
  • See your payoff progress in graph and table form

Free account:

  • Sort & export your debt payoff data to Excel
  • Updates automatically when you make additional payments
  • Compare different debt reduction strategies
  • Switch strategies without any hassles if you change your mind
  • Supports temporary promotional interest rates

On top of all this, Undebt.It offers a free 30-day trial to their premium membership, which gives you access to a huge variety of other tools to help you manage your money better. The beauty of the trial is that it automatically cancels unless you decide to give over your payment information.

Unlike other subscription models, Undebt.It is honestly dedicated to helping people fix their money situation, so they don’t try to sneak in a recurring subscription just because you forget to cancel your free trial. This is rare so we want to give a special kudos to them for doing what’s best for the customer.

If you do find the extra bells and whistles helpful, the cost is only $12 per year to stick with the premium membership. Otherwise, you can still make a lot of progress just by using the free account features.


If you go with the premium membership for Undebt.It, use it!

Set a recurring weekly reminder on your phone to log in and review your financial status. Be sure to set it for a time that you know you’ll actually be free to look at your account.


Tired of throwing all your hard-earned money on debt interest? Crush them down with a debt avalanche and pay off your debt the smart way. Use this debt reduction strategy to tackle your debts and save money on interest. Use our free debt avalanche printable or check out our pick for the best debt avalanche calculator.


  • Gather all of your statements and see what you owe now
  • Download our free debt avalanche printable (look for the green box)
  • Create a debt avalanche plan to snuff out your interest and debt



stacy trinh aka aunty chang headshot


STACY, aka AUNTY CHANG, is a personal finance blogger set on a mission to show people that there's more to money than just the numbers. With two rental properties and a six-figure 401k by her 30's, she's on track to retire early without sacrificing work-life balance to get there. She wants to teach others how to identify their goals and use money to make them happen. Dual income, no kids, based in Hawaii.

Hangs out on Keeping Up with the Changs: Facebook | Twitter