Quiz The Get-Out-of-Debt Quiz Updated January 2015 iStockphoto Your bills are piling up, you can hardly make your payments, and as a result, you don’t have enough money at the end of each month to set aside for the future. Is debt weighing you down? You’re not alone. The median American household debt is $70,000 (including mortgage and real estate debt), according to the most recent statistics from the Census Bureau. Whether you owe a lot or just a little, we can help. Paying off credit cards and loans requires a plan; you can’t just throw extra money at the problem and hope it goes away. Take our eight-question quiz to learn strategies that will help you get out of debt faster. Start Quiz Quiz | The Get-Out-of-Debt Quiz Question 1 of 3 You've just received a big tax refund, and you want to use it to pay down some debt. Smart move, but which of your debts should you pay down with your extra cash? A car loan Credit card debt Student loans Your mortgage Quiz | The Get-Out-of-Debt Quiz Question 1 of 3 You've just received a big tax refund, and you want to use it to pay down some debt. Smart move, but which of your debts should you pay down with your extra cash? A car loanCredit card debt Credit card debt usually carries a higher interest rate than the other types of debt mentioned, making it more expensive. And it’s more damaging to your credit score. The interest on student loans can be deducted on your federal tax return if your income falls below a certain level. And mortgag... Read more ˅ Credit card debt usually carries a higher interest rate than the other types of debt mentioned, making it more expensive. And it’s more damaging to your credit score. The interest on student loans can be deducted on your federal tax return if your income falls below a certain level. And mortgage interest can be deducted if you itemize. Not so with credit card debt. Less ˄ Student loansYour mortgage Next Question Quiz | The Get-Out-of-Debt Quiz Question 2 of 3 If you have several credit cards, should you pay off the card with the lowest balance or the highest interest rate first? Lowest balance Highest interest rate Quiz | The Get-Out-of-Debt Quiz Question 2 of 3 If you have several credit cards, should you pay off the card with the lowest balance or the highest interest rate first? Lowest balanceHighest interest rate Studies show that most people pay off the card with the smallest balance first. But the best strategy for paying down debt is to make the minimum payment on all of your cards except the one that charges the highest interest rate. For that card, pay as much as you can afford each month. When that ... Read more ˅ Studies show that most people pay off the card with the smallest balance first. But the best strategy for paying down debt is to make the minimum payment on all of your cards except the one that charges the highest interest rate. For that card, pay as much as you can afford each month. When that balance is paid off, concentrate on the card with the next-highest rate. This approach minimizes the amount of interest you pay over time, which means you’ll pay off the cards as quickly and cheaply as possible. Less ˄ Next Question Quiz | The Get-Out-of-Debt Quiz Question 3 of 3 If you have a $5,000 balance on a credit card with an 13% interest rate (the average for fixed-rate cards), how long would it take to get rid of your debt if you made just the minimum monthly payment of 2% of the balance? (Hint: It’s a long time.) More than 5 years More than 9 years More than 17 years More than 26 years Quiz | The Get-Out-of-Debt Quiz Question 3 of 3 If you have a $5,000 balance on a credit card with an 13% interest rate (the average for fixed-rate cards), how long would it take to get rid of your debt if you made just the minimum monthly payment of 2% of the balance? (Hint: It’s a long time.) More than 5 yearsMore than 9 yearsMore than 17 yearsMore than 26 years If you make just the minimum payment ($100 to begin with), it will take you 26 years and nine months to get rid of $5,000 in credit card debt, and you will pay more than $5,500 in interest. On the other hand, you could wipe out that debt in a year if you paid $450 a month – and you would pay on... Read more ˅ If you make just the minimum payment ($100 to begin with), it will take you 26 years and nine months to get rid of $5,000 in credit card debt, and you will pay more than $5,500 in interest. On the other hand, you could wipe out that debt in a year if you paid $450 a month – and you would pay only $352 in interest. The Credit.com Credit Card Payoff Calculator can help you figure out how long it will take to pay off your card based on the amount you pay each month. Less ˄ See Results Quiz | The Get-Out-of-Debt Quiz Results Next QuizTrue or False: Test Yourself on Social Security Basics See All Quizzes answer_num=2,2,4|answer_text="Credit card debt","Highest interest rate","More than 26 years"|total_questions=3|url=/quiz/credit/T025-S001-the-get-out-of-debt-quiz/index.html|total_pages=8|page_id=12253|evaltext_num=0|kipad_id=GettingOutofDebtQuizzes Advertisement Advertisement Sponsored Financial Content