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Dudd has $10,000 in outstanding charges on his credit card. He has been paying more than...

  1. Dudd has $10,000 in outstanding charges on his credit card. He has been paying more than the minimum amount each month, but the interest rate is 20%. He has equity in his home, with only a first mortgage. Recommend a more cost-effective way to manage this debt.

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Expert Solution

Take a loan of 10000 i.e., second mortgage on home if the interest rate on second mortgage is less than 20%. Pay the credit card oustanding in full from that loan.

jeff jeffy answered 2 years ago
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