The Debt Avalanche That Freed Up $340/Month
A reader used the debt avalanche on $22,000 of debt. The sequence took 29 months. The last payment freed up $340/month.
The Debt Situation
Reader had three debts: $8,400 on a retail card at 28.99% APR, $7,200 on a personal loan at 18.5% APR, $6,400 on a credit card at 22.99% APR. Total: $22,000. Minimum payments: $520/month combined. Monthly budget available for debt: $860.
The Avalanche Sequence
Avalanche method: highest interest rate first. Sequence: retail card (28.99%) first, personal loan (18.5%) third. With $860/month: retail card paid off in month 10, personal loan paid off in month 22, final card cleared in month 29. Total interest paid: $4,847.
Snowball method comparison (lowest balance first): same debts, same budget, same 29 months. Total interest paid: $5,319. Difference: $472 saved with avalanche. The months-to-freedom are identical in this case — the avalanche wins on total interest cost alone.
What $340/Month Unlocks
After month 29, the minimum payments that were servicing $22,000 in debt are gone. $340/month becomes available. The reader applied for Chase Sapphire Preferred in month 27 — 60 days before paying off the last card — to time the welcome bonus to a large purchase. Their credit score had improved from 634 at the start to 712 at payoff. The welcome bonus: 60,000 points after $4,000 in spending. At their spending level, the threshold was met in 3 months.
The $340/month is now invested. The card earns rewards on spending they were already doing. This is the financial structure that credit cards are designed to work within — no balance, no interest, all rewards.