Strategies for Effective Debt Payoff

The video discusses strategies for paying down debt, focusing on the snowball and high rate methods. The snowball method involves paying off debts from the smallest to largest balance, while the high rate method targets debts with the highest interest rates first. Both methods have their advantages, with the snowball method providing motivational boosts and the high rate method saving money over time. The video also advises seeking professional help if struggling with debt payments.

What is the main benefit of having a debt repayment strategy?

• It allows you to borrow more money.

• It helps you map out a realistic plan to pay off your debt.

• It increases your credit card limits.

• It reduces your monthly income.

In the Snowball Method, which debt should you focus on paying off first?

• The debt with the highest balance.

• The debt with the longest term.

• The debt with the lowest balance.

• The debt with the highest interest rate.

Tags

CCSS.7.RP.A.3

What should you do with a credit card account after paying off its balance using the Snowball Method?

• Increase its credit limit.

• Continue using it for new purchases.

• Transfer its balance to another card.

• Stop using it until all debts are cleared.

Tags

CCSS.7.RP.A.3

What is the primary focus of the High Rate Method?

• Paying off the debt with the highest balance first.

• Paying off the debt with the longest term first.

• Paying off the debt with the highest interest rate first.

• Paying off the debt with the lowest balance first.

Tags

CCSS.7.RP.A.3

Which method is likely to save you more money in the long run?

• Snowball Method

• High Rate Method

• Neither method saves money

• Both methods save the same amount

Tags

CCSS.7.RP.A.3

According to supporters of the Snowball Method, what is a key benefit of this approach?

• It reduces your interest rates.

• It provides a motivational boost with each debt paid off.

• It increases your credit score immediately.

• It allows you to borrow more money.

Tags

CCSS.RI.6.3

CCSS.RI.6.5

CCSS.RI.7.3

CCSS.RI.8.3

CCSS.RI.9-10.3

What does a study published in the Journal of Marketing Research suggest about the Snowball Method?

• It is the most cost-effective method.

• It is not effective for most people.

• Closing accounts after they are paid off is a good predictor of long-term debt elimination.

• It is the fastest way to get out of debt.

Which method might be better for someone who needs constant motivation?

• High Rate Method

• Both methods are equally motivating

• Snowball Method

• Neither method is motivating

When might it be beneficial to seek help from a certified financial professional?

• When you want to increase your credit limit.

• When you have no debt.

• When you are unable to make your minimum payments.

• When you want to open a new credit card.

What is the most important factor in successfully getting out of debt?

• Borrowing more money.

• Having a high credit score.

• Determination, dedication, and a plan.

• Using multiple credit cards.