Debt Landslide

The Debt Landslide Method

Debt Repayment for Households Needing to Rebuild their Credit Quickly

The Debt Landslide is not new and isn’t revolutionary. However, this method deserves to take its place beside the Snowball and the Avalanche methods because so many individuals and households have the goal of rebuilding their credit ratings while paying off their debts. Since credit scoring models give more weight to recent activity, especially activity on new accounts, the Debt Landslide method will have the greatest effect on credit ratings of the various debt repayment methods. The Debt Landslide is just one of many methods you should consider when seeking to accelerate your debt freedom plan.

How to make the Debt Landslide Method work:

  • Write down what your minimum monthly payments are for all your current debts.

  • Do not use your credit cards, store cards, or other lines of credit again, at least until they are paid off in full and you are ready to use them responsibly.

  • Create a list of all your debts (credit cards, store cards, car loans, home loans, personal loans, collections, student loans, etc.) and order them from your most recently-opened account at the top to the oldest account at the bottom. This is your debt attack order.

  • Make minimum payments to every account on your list except the account at the top. Add all available cash to the minimum payment of the account at the top of your list.

  • Each time you pay off an account, add the payment previously sent to that account to the next account at the top of the list. This is known as “rolling over” your payment.

  • Become debt-free in just three or four years with the Debt Landslide rather than fifteen to twenty-five years with standard minimum payments. Including your car and mortgage payments in this process could cut your repayment terms in half.

Who is the Debt Landslide for?

The Debt Landslide repayment method works best for any individual or household looking for a way to maximize the credit-building power of accelerating their debt repayment plan. Such households are often considering home-ownership in the coming one to two years and want to minimize the interest rate on their future mortgage loan.

The individual or household must also be committed to the plan. This plan will demand patience and possibly some tenacity to complete. If you choose this plan, your motivation must come from the ultimate goal of qualifying for the best terms possible on your future loans, not to mention from the idea of living debt-free. Motivation will not originate from the progress you hope to see any time soon since progress can initially appear quite slow.

Since it might take two to four years or more to pay off the first account on your list (depending, of course, on your individual circumstances), an individual or household embarking on this repayment plan method will need to possess sufficient patience and discipline to see the plan through to the end. Unfortunately, since we do not often get into crushing consumer debt due to an over-abundance of self-discipline, this required character trait may not be present as often as hoped for.

By using the Debt Landslide method, similar to other methods discussed on this website, you can get out of debt in a fraction of the time of standard monthly minimum payments while also cutting the amount of interest you pay to just a fifth or less of the standard method.

How does the Debt Landslide Method work?

As the name implies, the Debt Landslide generally starts with relatively small payments that increase in size as the balances cascade downward toward $0.

To maximize this method, find an additional $50 to $200 or more to include with your payment to the debt at the top of your list. If you are unsure of how to come up with this amount of extra payment, look over our PowerCash tool and calculator for help.

Send your extra payment each month to the creditor on top of your list. Once you have paid off your first account, add that account’s former payment and the extra payment you were sending to the next debt on your list. Rollover such payments every time you pay off an account.

Be careful not to start spending any freed-up money again on consumer purchases once you pay off an account. Your goal is to experience debt freedom, not continual debt.

An example of the Debt Landslide Method

Here is a comparison of the Debt Landslide method against the standard Minimum Monthly Payment method. This comparison includes two scenarios, one Landslide without extra PowerCash and one Landslide with $50 in PowerCash. The balances are similar on the cards to make the demonstration easier to follow:


Number of credit cards: 4

Balance on each card: $4,000

Minimum Monthly Payment Calculation: 3% of Balance

Annual Percentage Rates (Interest): 10%, 13%, 16% and 20%

Initial Monthly Minimum Payments: $120 for each account ($480 total)

Minimum Monthly Payment Method:

Time to Pay Off: 17.0 years

Total Interest Paid: $11,155 (an extra 70% beyond the original balance)

Debt Landslide Method with PowerCash:

Time to Pay Off: 3 years 4 months

Total Interest Paid: $4,270

Using the Debt Landslide method over minimum payments means you will be debt-free nearly 14 years sooner and will have paid 62% less interest ($6,885).

Debt Landslide Method with $50 PowerCash:

Time to Pay Off: 3 years 0 months

Total Interest Paid: $3,638

Using the Debt Landslide method with $50 PowerCash over minimum payments means you will be debt-free 14 years sooner and will have paid 67% less interest (that is $7,517 you keep in your pocket).

Keys to Debt Landslide Success

Besides committing to and sticking with your Debt Landslide repayment plan, there are additional actions you should take to see your plan through to success. They include the following:

  • Contribute to an emergency savings fund EVERY month, even if it is just a few dollars.

  • Put together a spending plan (aka “budget”) so you know how much you can spend on all aspects of your life.

  • If you get a raise at work, take on another job to earn a second salary, receive a cash gift, or get a tax refund, split the additional income between your emergency savings fund, a retirement plan, and your Debt Landslide repayment plan. You do not need to split the income evenly but you do need to commit to contributing a fair share to each activity.

  • Continue to live below your budget so that you avoid consumer debts in the future.

  • Keep track of your progress. Create a line graph that shows your debt balances on the vertical (left) axis and the month on the horizontal (bottom) axis. After just four or five months, you will see a line forming that will point to your estimated pay-off date.

  • Consider throwing yourself a debt freedom party. The month after you become debt-free, consider using no more than half the money previously sent to your creditors to celebrate your achievement. It might be a small trip, a wardrobe makeover, a service you have never paid for before (e.g. home cleaning, car detailing, etc.), or some other treat. Enjoy the feeling of freedom that you have just generated through your hard work and dedication.

Now that you have a grasp on how the Debt Landslide works, determine whether it is the plan for you. Consider the Debt Snowball, Avalanche, and Cascade methods as well. Regardless of which plan you choose, get started today. The sooner you start, the sooner you can celebrate your debt freedom.

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