Deep Dive


Emma Nunes-Vaz
January 16, 2024

Next in the series is the avalanche method, so let's take a closer look...

What is it?

The avalanche method prioritises paying off your debts with the highest interest rates or APR first, all whilst paying the minimum amount towards the rest of your debts. It requires you to list your debts from highest to lowest interest rate and APR, as well as review your budget to figure out how much you can afford to put towards your repayments. Once you pay-off the balance with the highest rate, you take the funds you’d been using to do so and put them toward your next-highest-interest balance, and so on and so forth until you’ve cleared all of your debt!

The pros

By paying off the debts with the largest interest rates first, you’re paying less interest over all – and it should help prevent your debts from running away from you. The avalanche method can also reduce the amount of time it takes to pay off your debts compared to other strategies, as you’re keeping interest rates to a minimum. 

The cons 

This method requires a lot of discipline; including always putting your extra discretionary income towards the same debt, which could take a while to pay off. You also need to get your head around the interest rates attached to each debt – rather than just looking at the sum you owe – to work out which debt to focus on first. Moreover, some get discouraged if they have a large debt that seems impossible to pay off, and find more success and a sense of accomplishment in quickly paying off debt balances, regardless of how small they are. 

Luckily, although the avalanche method sounds like hard work, it’s available on our Incredible app where we do all the hard work for you! You won’t need to research your interest rates or APR, or even take the time to list them. Here at Incredible we do this all for you, making it easier, faster and cheaper than ever to pay off your debt.