 TITLE: The Debt Avalanche Method: How It Works and When to Use It CONTENT: How to Pay Off Debt Using the Avalanche Method\n----------------------------------------------\nHere's an example of what the debt avalanche method could look like. Let's say you have three credit card balances: $8,000 at 15% APR; $3,000 at 18% APR; and $5,000 at 20% APR.\nIf you make only the minimum payments on each debt—which are typically calculated as 1% to 4% of your outstanding balance—you could pay almost $9,000 in interest, and you wouldn't be debt-free for almost 12 years.\nUsing the debt avalanche, you'd pay off the $5,000 balance first, even though it's not the largest, because it has the highest interest rate. Once it's gone, you'd then apply its minimum monthly payment to the $3,000 balance with the 18% APR. Once the $3,000 balance is paid off, you'd apply its monthly payment to the final $8,000 balance.\nInterest savings will add up. You'll save almost $3,000 in interest alone by paying off your first $5,000 balance in 12 months, rather than the nearly 12 years it would take when paying only the minimum. END