Wally currently has a balance of $14,500 on his credit cards and he is having a hard time making the minimum payments on them.He has missed several payments and is now paying the default APR of 29.99%.He and his wife own a nice home with $40,000 in equity.They have $7,500 in a certificate of deposit with a 4% APR.He has come to you in tears asking for advice.What would you tell him to do?

Question

Quizplus · Accepted Answer

Each option provided offers a viable strategy for managing or reducing Wally's debt. Seeking out a non-profit credit counseling company can provide him with professional advice and potentially a debt management plan. Cashing out his CD to pay down his credit cards can reduce the high-interest debt he's facing. Becoming a convenience user by maintaining just one credit card can help him manage his spending better moving forward. Taking out an equity loan on the house could allow him to consolidate his debt at a lower interest rate, using his home equity.

Wally Currently Has a Balance of $14,500 on His Credit