Managing Credit Card Debt

What is the first step in managing credit card debt?

• Paying only the minimum balance

• Ignoring the debt and hoping it goes away

• Creating a budget and tracking expenses

• Using credit cards for all purchases

Which of the following is a consequence of carrying high credit card debt?

• Improved credit score

• Lower interest rates

• Increased financial stress

• Higher income

What is the recommended percentage of credit utilization to maintain a good credit score?

• 10%

• 30%

• 50%

• 100%

What is a balance transfer?

• Transferring money from a savings account to a credit card

• Transferring a credit card balance to another credit card with a lower interest rate

• Transferring debt to a friend or family member

• Transferring debt to a mortgage loan

Which of the following is a strategy for paying off credit card debt?

• Making only the minimum payment each month

• Consolidating debt into a new credit card

• Paying off the highest interest rate card first

• Using credit cards for daily expenses

What is the purpose of a debt snowball method?

• To increase credit card debt

• To pay off debt with the highest interest rate first

• To ignore debt and hope it goes away

• To transfer debt to a new credit card

What is a credit counseling agency?

• An agency that provides free money to pay off credit card debt

• An agency that helps individuals create a budget and manage debt

• An agency that increases credit card interest rates

• An agency that offers credit cards with high credit limits

What is the purpose of a debt management plan?

• To increase credit card debt

• To consolidate debt into a new credit card

• To negotiate lower interest rates and create a repayment plan

• To transfer debt to a mortgage loan

What is the recommended debt-to-income ratio for managing credit card debt?

• Less than 10%

• Less than 30%

• Less than 50%

• Less than 100%

What is the purpose of a credit card hardship program?

• To increase credit card debt

• To transfer debt to a new credit card

• To negotiate lower interest rates and create a repayment plan

• To ignore debt and hope it goes away