American household debt is at record levels — student loans, auto loans, credit card balances, and mortgages collectively represent trillions in obligations. This guide gives you the framework to approach your specific debt situation with clarity.
The order of priority: not all debt is equal
| Debt type | Typical APR | Priority |
|---|---|---|
| Credit card (average) | 21-27% | Highest — attack immediately |
| Personal loan | 10-20% | High |
| Auto loan | 5-12% | Medium |
| Private student loans | 5-14% | Medium |
| Federal student loans | 4-8% | Lower — flexible repayment options exist |
| Mortgage | 4-7% | Lowest — investing may beat this rate |
Avalanche vs Snowball: which wins?
- Avalanche (highest interest first): Mathematically optimal — saves the most money in total interest. Best for people who are motivated by numbers and can sustain momentum.
- Snowball (smallest balance first): Psychologically powerful — wins create momentum. Costs more in total interest but has higher completion rates in studies. Best for people who need quick wins to stay engaged.
💳 Credit Card Debt Cost Calculator
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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