Quick Answer
An illustrative scenario describing a household with $42,000 in credit card debt across five accounts paid off in 36 months using the avalanche method.
Key Takeaways
- Avalanche minimizes interest paid.
- Five accounts consolidated into a single highest-rate-first plan.
- Behavior - not the method - was the largest factor.
Setup
Combined balances of $42,000 across cards with APRs from 18% to 27%. Monthly free cash flow of $1,400 applied to the plan.
Frequently Asked Questions
Why avalanche, not snowball?
The scenario chose avalanche to minimize total interest paid. Snowball would have paid more interest but cleared smaller accounts faster.