1. Social Sciences
  2. Psychology
  3. 1 read the case study below and choose the best...

Question: 1 read the case study below and choose the best...

Question details

Read the case study below and choose the best possible answer to the following questions.

During Jennifer’s first year of college, she and her friends made a weekly trip to the mall. Most of the time they would just hang out, but Jennifer had applied for several store credit cards. It didn’t seem like a big deal. She would buy a few things each week, and the card made it really easy. Jennifer had a work-study job on campus, but with all her other bills, she was having a hard time making the card payments. At the end of the semester she was $2,000 in debt and was two months behind making the minimum payments.

How could Jennifer have avoided this situation?

Used a debit or prepaid credit card when shopping at the mall, so she would not be able to spend more than she can reasonably afford.
Asked for a raise at her work study job to help her pay her debts.
Applied for one major credit card, rather than several store credit cards, as the interest rate would be lower.
Called each of the creditors and ask for a decrease in her interest rate.
2. Which is a possible outcome of Jennifer’s careless financial behavior?
She will be able to roll all of her lower-limit store credit cards into one larger-limit major credit card, such as a Visa or Mastercard.
She might not be approved for future student loans.
She will improve her credit score by having multiple active credit accounts.
She will be well-qualified for a mortgage when she looks to purchase her first home.
3. What is one thing Jennifer can do to correct her situation?
Meet with a trustworthy financial advisor who can help her establish a plan to pay off her outstanding debt and teach her how to use credit cards responsibly.
Choose the card with the highest outstanding balance and only make payment to that one until it is paid off. Once paid off, start making payments to the card with the second highest balance.
File for bankruptcy
Drop out of school to get a full-time job so she can pay off her debt.
4. In the future, Jennifer could use a budget to help her better manage her money and live within her means. Which is NOT a fixed expense Jennifer might include on her budget?
Repair costs for her car.
Rent costs for her apartment.
Health insurance premium.
College tuition costs.
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution