I know @tom has already clearly stated that doesn’t yet have an interest in offering credit cards or mortgages and may never do so. That’s not what this topic is about and I’m not here to change that.
The unfortunate truth however is that a lot of us still have a fair amount of debt. I know I do and one way to solve that problem is get smarter when paying it all off, which is where comes in.
Some of you may know about the “Avalanche” method when paying off multiple debts. For those who don’t it’s essentially this:
- decide how much you can afford to pay towards all debts
- pay the minimum towards all debts except the one that’s costing you most money in interest, which gets the remainder of the total
- repeat step 2 until that debit is cleared.
- now repeat step 2 with the next most costly interest rate.
This would require inputting additional data for each debt:
- the type of debt (credit card, loan or mortgage)
- the interest rate
- the % rate for calculating minimum payments (for credit cards)
- the term remaining (for loans and mortgages) or time remaining for 0% balance transfer and 0% new purchase interest periods (for credit cards)
- if there is a early repayment penalty, then how much (for loans and mortgages)
You’ll be alerted if the total you decide is less than the minimum for all debts combined.
Finally, if you’re coming to the end of your Avalanche or if you’re just that good with money, then after the final debt has been cleared it’ll automatically switch to pay into your savings account every month.
If you’re debts happen to be in an interest free period, then it’d make sense for to pay the excess above the minimum into your savings until that interest free period ends when those savings will automatically be used to pay off as much as possible of the most costly debt. Though, you should of course receive a notification before this happens.