WorksheetsManaging Credit Bell Ringer 1
Total questions: 8
Worksheet time: 4mins
Paying more than the minimum payment (or paying your balance in full) is beneficial because…
It lowers your interest rate
The lender can’t penalize you for future late payments
You get a discount on future purchases made with credit
You pay less interest overall
If a person with multiple sources of debt has a goal of eliminating one or more of them in as little time as possible, which debt repayment strategy would be best?
High interest method
Snowball method
Stopping payments on all debts but one so you can pay that one off faster
Making the minimum payment
Which of the following is a type of secured debt in which the item you purchased might be seized if you fail to make payments?
Auto loan
Credit card
Student loan
Personal loan
Which of these represents a potential consequence of neglecting to pay your federal student loans?
Wages or tax refunds can be garnished
Passport revocation
Driver’s license suspension
Termination from your job
Which best describes the Debt Snowball method for paying off debt?
Only make payments on your smallest debt first, then move on to your second smallest debt, and so on
Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
What strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time?
Snowball method
Make minimum payments
High rate method
Consolidate multiple debts into one new loan
Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…
Reducing spending by canceling some of her streaming subscriptions
Taking extra shifts at work to increase her income
Making more than the minimum required payment on her debt
Applying for another credit card to use in case she runs out of cash paying off her debt
Why is it important to have an emergency fund?
To cover unexpected expenses without going into debt
To spend on vacations and luxury items
To invest in the stock market
To lend money to friends
