Updated January 2026<\/em><\/p>\n If you\u2019re juggling credit cards, lines of credit, or personal loans, interest can quietly become the most expensive part of your debt. The debt avalanche method<\/strong> (sometimes called the avalanche budget method<\/strong>) is a proven strategy that helps you pay off debt more efficiently<\/strong> by targeting the balances with the highest interest rates first<\/strong>.<\/p>\n This is especially useful in Canada, where many credit cards have purchase interest rates commonly listed around 19.99%\u201320.99%<\/strong> (and can be higher). When rates are that high, getting strategic about where your extra payments go can make a real difference.<\/p>\n Quick takeaway:<\/strong> The avalanche method prioritizes the debt that costs you the most per day<\/em> in interest\u2014so you pay less overall and get debt-free sooner (assuming you stick with it).<\/p><\/blockquote>\n Need a loan option instead?<\/strong> If you\u2019re comparing alternatives like consolidation, start with our Best Loan Options Guide<\/strong><\/a> (and compare total cost, not just the monthly payment).<\/p>\n The debt avalanche method<\/strong> is a debt payoff strategy where you:<\/p>\n This differs from the debt snowball method<\/strong>, which focuses on the smallest balance first. The avalanche approach is often recommended when your priority is minimizing total interest<\/strong> paid over time (rather than maximizing quick psychological wins).<\/p>\n Create a simple table with:<\/p>\n Include credit cards, lines of credit, personal loans, and student loans (with notes about special programs).<\/p>\n Your top priority is the debt with the highest APR\u2014even if its balance is not the largest.<\/p>\n Minimum payments keep accounts current and help protect your credit profile. Credit scores are generally based on information in your credit report such as payment history and debt levels, and in Canada they typically range 300\u2013900<\/strong>.<\/p>\n If you want to strengthen your credit while repaying debt, see our Credit Building Tips<\/strong><\/a>.<\/p>\n All \u201cextra\u201d money goes to the top-ranked debt until it\u2019s paid off.<\/p>\nHow the Debt Avalanche Method Works in Canada<\/h2>\n
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What is the debt avalanche method?<\/h2>\n
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How the avalanche method works (step-by-step)<\/h2>\n
1) List every debt (with the numbers that matter)<\/h3>\n
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2) Rank debts by interest rate (highest \u2192 lowest)<\/h3>\n
3) Pay minimums on all debts (no exceptions)<\/h3>\n
4) Put every extra dollar on the highest APR debt<\/h3>\n