Bob's credit card charges him 14% interest on his unpaid balance.His bank is offering him 5% interest on a savings account.The first thing Bob should do with any extra money he may have is to:
A)invest in the stock market.
B)open a savings account.
C)pre-pay for necessities,like rent and utilities.
D)pay off the credit card balance.

Question

Quizplus · Accepted Answer

Bob should pay off his credit card balance first because he is being charged a much higher interest rate on his unpaid balance than what he would earn in a savings account. By paying off the credit card balance, he can save money on interest fees and be in a better financial position to start saving.

Bob's Credit Card Charges Him 14% Interest on His Unpaid