Question

Henry is having trouble paying his rent and making minimum payments on loans and credit cards. Which should he consider? Check all that apply.
Apply for a larger loan at a different bank.
Create a budget to track income and expenses.
Apply for a credit card to pay for his other expenses.
Make less than the minimum payments on his loans and credit cards.
Talk to a consumer credit counseling service.

Answer 1

- Create a budget to track income and expenses. (Yes)
A budget helps identify where to cut spending and how much you can realistically allocate to rent and minimum payments.

- Talk to a consumer credit counseling service. (Yes)
A reputable nonprofit counselor can help negotiate with creditors, set up a repayment plan, and advise on debt-management options.

Do not choose:
- Apply for a credit card to pay for his other expenses. (No) — This typically increases debt and interest charges.
- Make less than the minimum payments on his loans and credit cards. (No) — Paying less than the minimum leads to late fees, higher interest, and damaged credit.
- Apply for a larger loan at a different bank. (Generally not recommended) — Taking on more debt can worsen the situation; debt consolidation may help in some cases but should be considered only after careful evaluation or with guidance from a counselor.