Debt Management

What should you do if your credit card is lost or stolen?

• Wait a week to see if it turns up

• Report it immediately to the credit card issuer

• Use it until it is found

• Ignore it and apply for a new card

What is collateral in the context of loans?

• A type of unsecured loan

• An asset pledged to secure a loan

• A loan with no interest

• A reward for timely payments

What is the consequence of paying a credit card bill late?

• Increase in credit score

• Late fees and potential damage to credit score

• Reduction in interest rate

• Increase in credit limit

What is considered 'Good Debt'?

• Debt from luxury items

• Debt from credit card purchases of non-essentials

• Debt from student loans or mortgages

• Debt from payday loans

What is a potential downside of debt consolidation?

• Immediate repayment in full

• Possibly being in debt longer and paying more interest overall

• Shorter repayment period

• Higher initial interest rates

What type of debt is typically considered 'Bad Debt'?

• Mortgage on a house

• Credit card purchases for clothes or food

• Student loans

• Investment in business

What can you do to reduce your overall debt burden?

• Take out more loans

• Only pay the interest

• Pay less than your minimum balance

• Pay more than your minimum balance

What is a strategic plan to manage debt effectively while maintaining a good credit score?

• Consolidate all debts into one high-interest loan.

• Pay off debts with the highest interest rates first while making minimum payments on others.

• Ignore small debts and focus only on large ones.

• Use savings to pay off all debts immediately.

What is a strategic way to handle a sudden increase in debt to maintain a healthy credit score?

• Ignore the debt and hope it goes away.

• Create a budget to manage expenses and prioritize debt repayment.

• Apply for more credit cards to spread the debt.

• Close all credit accounts immediately.

A contractual agreement in which a borrower receives something of value now and agrees to repay the lender in the future, generally with interest is called . . .

• a personal loan

• credit

• a mortgage

• all of these