El Castillo Investments

Which of these is generally considered "good debt"?

• High-interest credit card debt used for shopping
• A mortgage or student loan that builds long-term value
• A payday loan
• Debt used to fund a vacation

What does it mean to manage debt responsibly?

• Ignoring the balance until it disappears
• Paying at least the minimum on time and paying down high-interest debt first
• Taking out new debt to cover old debt indefinitely
• Avoiding ever checking your balance

If you're struggling to keep up with debt payments, what's a smart first step?

• Take out a payday loan
• Reach out for help — a credit counselor, lender, or trusted advisor
• Stop opening any mail about it
• Open several new credit cards

What is the "debt avalanche" method?

• Paying off the smallest balance first, regardless of interest rate
• Paying off debts in order of highest interest rate first
• Paying only minimums on everything, indefinitely
• Consolidating all debt into one higher-interest loan

Why is it risky to only make minimum payments on credit card debt?

• It isn't risky at all
• Interest can build quickly, making the balance take far longer — and cost more — to pay off
• Minimum payments pay off the principal fastest
• Card companies penalize you for paying minimums