7
QuizMultiple Choice

Paying Off Debt

Question 7 • Personal Finance - EL3403

Which answer choice best describes the debt snowball method?

Answer
A
pay off credit cards in order of interest they carry, lowest interest first
B
pay off credit cards in order of interest they carry, highest interest first
C
pay off credit cards in order of balance amount, lowest balance first
D
pay off credit cards in order of balance amount, highest balance first

Explanation

The debt snowball method focuses on building momentum by paying off the smallest debt balance first, while making minimum payments on the others. After paying off that balance, you apply the freed-up payment to the next-smallest balance. So the best answer is “pay off credit cards in order of balance amount, lowest balance first.”

AI-written and checked against the verified answer.

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