NAPALM: Highest Rate First

Part II: Attack

What you'll get from this chapter: The NAPALM method step by step: ranking by interest rate, setting your attack amount, and making your first monthly allocation.

The debts charging the highest interest rates are the enemy positions doing the most damage. NAPALM is the method of identifying those positions and destroying them first, with concentrated force, then rolling that force onto the next target until the field is clear.

NAPALM is a codename, not an acronym. It names the doctrine: concentrated, overwhelming fire on one target at a time, burned down completely before moving on.

It is less emotionally satisfying than knocking out small balances quickly. But for a given amount of money, it is generally the faster and cheaper path to the end of the war. It is the standing order of this campaign.

Why Highest Interest Rate First

Every month a high-rate balance remains, it costs you more in pure interest than a lower-rate balance of the same size. A $5,000 balance at 25% costs about $104 a month in interest. The same $5,000 at 8% costs about $33. Every extra dollar you send to the 25% balance stops more bleeding than a dollar sent anywhere else.

When the top target is destroyed, the full payment that was going to it rolls onto the next-highest rate. The attack grows with each victory. Each payment frees more fire for the next target. But the order of targets is set by cost, not by size.

What NAPALM Targets

NAPALM targets consumer debt: credit cards, personal loans, buy-now-pay-later plans, auto loans, private student loans, and medical payment plans with interest. A mortgage is generally not a NAPALM target in this campaign. It is usually lower-rate, long-term, and secured by Key Terrain (what you must protect to keep fighting: income, housing, health, essential insurance, transportation, and family stability). You make the scheduled mortgage payment and track it on the map. Whether to accelerate a mortgage is a decision for after the consumer debt war is won, and the Generational Wealth Guide addresses it inside the Decision Tree.

Federal student loans have special rules (Chapter 15). Rank them by rate, but understand their options before you throw extra payments at them.

The Complete Operational Protocol

1. List every consumer debt with balance, interest rate, and minimum payment. (You did this in Chapter 2.)
2. Rank strictly by interest rate, highest to lowest. If two debts have nearly the same rate, put the smaller balance first. It falls sooner and frees the payment faster.
3. Automate the minimums on every debt. Late fees and penalty rates are self-inflicted wounds.
4. Set the attack amount: the exact extra dollars per month that go to the top target, on top of its minimum. This number comes from your supply line cuts, income raids, and any reallocation.
5. Fire on the top target every month with its minimum plus the full attack amount. Many fighters split the attack into two payments a month (for example, every payday) so the balance falls faster and less interest accrues. Check your lender's posting rules.
6. When the top target hits zero, take the full amount you had been paying on it (minimum plus attack) and add it to the minimum of the new top target. Do not reduce the total monthly attack. Do not let it leak into lifestyle.
7. Repeat until the list is clear.

Standing Rules

• No new debt while the protocol runs. Every new charge is enemy reinforcement.
• Never skip a minimum on any account.
• Re-rank if a rate changes: a promotional rate expires, a variable rate rises, or a negotiation succeeds.
• Same day every month. Choose an allocation day, ideally just after your main payday, and treat it as a fixed operation.

A Worked Example

This is an illustration, not a projection of your results.

Suppose you have three debts. APR means annual percentage rate, the yearly interest rate the lender charges.

You have freed $500 a month above the minimums through cuts and an income raid, for a total monthly attack of $1,005.

• Phase 1: Card A receives $105 + $500 = $605 a month. At 24%, it falls in roughly seven to eight months. Card B and the loan receive only minimums.
• Phase 2: Card A's full $605 rolls onto Card B. Card B now receives $150 + $605 = $755 a month, against a balance that has dropped a little from minimum payments during Phase 1.
• Phase 3: When Card B falls, $755 rolls onto the loan, which now receives $250 + $755 = $1,005 a month.

The total monthly attack never changes, $1,005, but its concentration does. In this example, smallest-balance order happens to give the same sequence, because the smallest balance is also the most expensive (Chapter 7 shows when the two orders split). Whenever they differ, smallest-balance order costs more total interest, because the higher-rate balances stay alive longer. Use a free online payoff calculator with your own numbers to see the exact difference for your list. That comparison is the Field Test in Chapter 7.

How to Find the Attack Amount

The attack amount is the most important number in the campaign. It comes from four sources:

1. Supply line cuts (Chapter 12): canceled subscriptions, reduced dining out, renegotiated bills.
2. Income raids (Chapter 10): overtime, side work, sold items.
3. Reallocation: money that was going to savings beyond the starter reserve (but never the 401(k) contribution that captures your full employer match), or to "extra" payments scattered across several debts.
4. Windfalls (Chapter 9): tax refunds, bonuses, and gifts, applied by standing order.

Start with a number you can hit every month without fail, even if it is small. A guaranteed $200 beats a hoped-for $800. Raise it as new sources come online.

Rules of Engagement

Authorized: Directing any found money, expense cuts, or extra income straight at the current top target.

Not authorized: Pausing the attack for lifestyle upgrades. Refinancing that simply resets the clock without a clear rate advantage. Reducing the total attack when a target falls.

Recovery provision: If motivation collapses and you are at real risk of quitting entirely, a short, deliberate switch to Snowball may be authorized as a recovery measure (Chapter 7). Then return to NAPALM.

Three Illustrations

Single operator. A fighter's top target is a 27% store card with a modest balance. With an attack amount of $400, it falls in under a year, and its payment rolls onto a 21% card. The fighter splits each month's attack across two paydays and sets a calendar reminder to re-rank when a promotional rate expires on another card.

Couple. Two partners discover that one partner's 22% card outranks the other's 7% car loan. They agree the joint attack fund hits the card first, regardless of whose name is on it, exactly as Chapter 4 prescribes.

Family. A household with tight cash flow starts with an attack amount of only $150. It does not feel like much. But it is concentrated on one 25% card instead of being spread thin, and every new raid dollar is added to it. Within a few months the attack has doubled, and the first card falls.

Worked Example: The First Allocation Day

Illustration. Payday is the 1st and the 15th. The attack amount is $400 a month. Here is exactly what happens on the first allocation day:

1. Morning of the 1st: confirm the paycheck has posted.
2. Confirm automatic minimums are scheduled on every account before their due dates.
3. Send $200 (half the attack amount) to the top target as an extra payment. Label it "principal" if the lender's website allows.
4. Record the date, amount, and new balance on the Debt Kill Board, the single chart that tracks every debt, its rate, and its balance.
5. On the 15th: send the second $200 and record it.
6. On the last day of the month: check the statement and confirm both payments posted.

Total time: about 15 minutes a month after the first setup.

What If the Payment Is Short One Month?

Pay the full minimums on every debt first. Send whatever remains of the attack amount to the top target. Record the shortfall and its cause in the Combat Log (your running notebook of observations, slips, and decisions). Do not try to "catch up" by skipping the reserve. Resume the full amount the next month.