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Basics Beginner: Managing Your Debt

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1.
If you file for bankruptcy, the bankruptcy will stay on your credit record for _______ years.
Choose wisely. There is only one correct answer.
10. After 10 years, it will disappear.
2.
Which type of goods usually become worth less over time?
Choose wisely. There is only one correct answer.
Consumer goods. Consumer goods are bought to be used up. Investment goods are bought to provide income or appreciation of value.
3.
When calculating payments for debts that use different interest rates, it is most effective to use the debt with the highest interest rate.
Choose wisely. There is only one correct answer.
True. This can help you pay off your total debt faster.
4.
A good way to reduce your monthly debt payments is to pay only the minimum amount due on credit card statements.
Choose wisely. There is only one correct answer.
False. Paying the minimum amount due on credit card statements will only increase the time and money paid on a debt.
5.
Which of the following types of loans would you expect to have the lowest interest?
Choose wisely. There is only one correct answer.
Short-term secured. Short-term and secured loans generally have lower rates than long-term or unsecured loans.
6.
If you are in debt, why is it important to first deal with the causes of the debt?
Choose wisely. There is only one correct answer.
It can prevent them from recurring. Though not guaranteed to, there is a good chance you can prevent future occurrences.
7.
You will usually have to pay additional costs for the privilege of consolidating your loans.
Choose wisely. There is only one correct answer.
True. Take these costs into account before you consolidate loans.
8.
Your recurring monthly debt payments (such as credit cards) should be considered _______ in your budget.
Choose wisely. There is only one correct answer.
Ghosts of prior expenses. Although you may pay them every month, they are not current expenses. They are remnants of past expenses that you must pay off over time.