chapter 4, section 5
DESCRIPTION
Chapter 4, section 5. Debt management. I can…. Analyze a credit card account when minimum payments are made. Calculate debt-to-income ratio. What is debt?. Using someone else’s money with the promise to pay it back. Credit cards are a form of debt. Example 1 & 2, p. 154 - PowerPoint PPT PresentationTRANSCRIPT
D E B T M A N AG E M E N T
CHAPTER 4, SECTION 5
I CAN…
• Analyze a credit card account when minimum payments are made.• Calculate debt-to-income ratio.
WHAT IS DEBT?
• Using someone else’s money with the promise to pay it back. • Credit cards are a form of debt. • Example 1 & 2, p. 154• Check your understanding A
WHAT’S A DEBT-TO-INCOME RATIO?
• A % that indicates the percent of one’s income spent on debt.• Debt-to-income ratio=Debt payments/gross
income• Example 3, p. 156
HOW CAN I REDUCE/MANAGE MY DEBT?
• USE CASH!!!• Avoid high interest rates!• Pay more than the minimum payment.• Pay off high interest credit cards first!• Debt counseling• Consider a consolidated loan (all your debt is
combined into one loan—must find a low interest rate).
LET’S PRACTICE!
• P. 158-159, 7-19