Debt Management Answers

Which of the following is least likely to be a warning sign that one's debt is at a critical point?

Brandon has two credit cards and would like to consolidate the two balances into one balance on the card with the lower interest rate. The table below shows the information about the two credit cards Brandon currently uses. Card ACard BAmount$1,463.82$1,157.98APR13%17%Monthly Payment$24.60$22.14After 8 years, how much will Brandon have saved in interest by consolidating the two balances?

Marcia has two credit cards and would like to consolidate the two balances into one balance on the card with the lower interest rate. The table below shows the information about the two credit cards Marcia currently uses. Card ACard BAmount$1,879.58$861.00APR14%10%Monthly Payment$43.73$18.29After 5 years, how much will Marcia have saved in interest by consolidating the two balances?

Charlene has a monthly salary of $3,410. With her present budget, Charlene has a net income that is 7% of her monthly salary. Charlene is going to reduce her net income by $125 each month and put this money towards paying down her debt. What will Charlene’s new net income be?

Marcia has two credit cards and would like to consolidate the two balances into one balance on the card with the lower interest rate. The table below shows the information about the two credit cards Marcia currently uses. Card ACard BAmount$1,389.47$1,065.32APR16%12%Monthly Payment$39.38$28.05After 4 years, approximately how much will Marcia have saved in interest by consolidating the two balances?

James has a balance of $1,230 on his credit card that has an APR of 24%. He currently pays the minimum monthly payment of $30.75. If James wants to pay off his balance in 18 months, determine the monthly payment he would need to make. Choose the following modification with the least cuts to his current expenses that will allow James to pay off his balance in 18 months. Income Wages $3,015.00 Expenses Rent $1250.00 Utilities $432.45 Food/Clothes $345.00 Entertainment $255.00 Car $360.00 Credit Card $30.75 Cell Phone $103.89 Net Income $237.91

Julius currently pays the minimum monthly payment of $34.15 on his credit card, which has a balance of $1,289. His credit card has an APR of 20%. If Julius wants to pay off the balance in 12 months, determine the monthly payments he needs to make. Choose the following modification with the least cuts to his current expenses that will allow Julius to pay off his credit card balance in 12 months.IncomeWages$2,456.00ExpensesRent$900.00 Utilities$186.35 Food/Clothes$298.00 Entertainment$330.00 Car$385.00 Credit Card$34.15 Cell Phone$89.49Net Income $233.01

Tony wants to pay off his credit card balances within 12 months. He is trying to decide if he should use his $1,000 in savings to pay off part of the balances or if he should transfer the balances to a new card with a low introductory rate. The new credit card has an introductory rate of 7% but charges a balance transfer fee of $75 for each balance transfer. Evaluate Tony's options and recommend the debt management plan that would give him the lowest monthly payment. Credit Card A: $794 Credit Card B: $579

Tamari has a monthly income of $4,250 and she wants to determine her monthly net income. She calculates that her fixed expenses are $1,955 and her variable expenses are 28% of her monthly income. How much is Tamari’s monthly net income?

Which of the following choices is not a step that can reduce your spending?

Caitlin has a balance of $4,880 on her credit card that has an APR of 16%. She currently pays the minimum monthly payment of $105.86. If Caitlin wants to pay off her balance in 20 months, determine the monthly payment she would need to make. Choose the following modification with the least cuts to her current expenses that will allow Caitlin to pay off her balance in 20 months. Income Wages $2,896.00 Expenses Rent $1200.00 Utilities $212.64 Food/Clothes $335.00 Entertainment $346.00 Car $490.00 Credit Card $105.86 Cell Phone $116.37 Net Income $90.13

Monica is trying to lower her credit card debt and has been tracking her expenses for the past month. She identified her variable expenses in relation to her fixed expenses. Without altering her variable expenses, how much extra could she possibly put towards her credit cards?

Jose wants to pay off his credit card balances within 18 months. He is trying to decide if he should use his $1,750 in savings to pay off part of the balances or if he should transfer the balances to a new card with a low introductory rate. The new credit card has an introductory rate of 8% but charges a balance transfer fee of $60 for each balance transfer. Jose decides to pay off Credit Card B using his savings and then transfer the balance of Card A to the new card. Which of the following options shows the amount of Jose's new monthly payment?Credit Card A: $1,154Credit Card B: $1,469

A warning sign that a credit counseling agency may not be legitimate is when they promise to _____.

Tony wants to pay off his credit card balances within 12 months. He is trying to decide if he should use his $1,000 in savings to pay off part of the balances or if he should transfer the balances to a new card with a low introductory rate. The new credit card has an introductory rate of 7% but charges a balance transfer fee of $75 for each balance transfer. Evaluate Tony's options and recommend the debt management plan that would give him the lowest monthly payment. Credit Card A: $794 Credit Card B: $579

Olya would like to find a way to reduce her current debt. The table below shows Olya’s monthly income, expenses and net income. Monthly BudgetAmountIncomeWages$2,750.00ExpensesRent$850.00 Utilities$236.54 Entertainment$410.00 Food$220.00 Cell Phone$114.98 Credit Card #1$56.79 Credit Card #2$38.45 Car Insurance$120.00 Car Payment$260.00 School Loan$250.00Net Income $193.24 After evaluating Olya’s monthly budget, which of the following would not be an option to help reduce her debt?

Monica is trying to lower her credit card debt and has been tracking her expenses for the past month. She identified her variable expenses in relation to her fixed expenses. Without altering her variable expenses, how much extra could she possibly put towards her credit cards?

MaryKay wants to identify her monthly variable expenses to see if they are more than 40% of her monthly income. MaryKay's monthly income is $3,800. Her net income is 7% of her monthly income and her fixed expenses are $1,824. Determine the total of MaryKay's variable expenses and if they are more than 40% of her monthly income.

Which step is not part of the 5-point credit card debt elimination plan?

Caitlin has a balance of $4,880 on her credit card that has an APR of 16%. She currently pays the minimum monthly payment of $105.86. If Caitlin wants to pay off her balance in 20 months, determine the monthly payment she would need to make. Choose the following modification with the least cuts to her current expenses that will allow Caitlin to pay off her balance in 20 months. Income Wages $2,896.00 Expenses Rent $1200.00 Utilities $212.64 Food/Clothes $335.00 Entertainment $346.00 Car $490.00 Credit Card $105.86 Cell Phone $116.37 Net Income $90.13