Definition
A payoff method that puts every spare dollar toward the highest-APR debt first while paying minimums on the rest. It is the mathematically cheapest route out of debt.
Why it matters
The avalanche minimizes total interest paid, full stop. If you can stay motivated without quick wins, it is strictly the cheapest exit from debt.
Example
With a 24% card, a 19% card, and an 8% loan, the avalanche sends every extra dollar at the 24% card first, then the 19% card, then the loan, regardless of balance sizes.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.