Credit & debt · Module 5 of 8
Clearing what you owe
Two proven ways to pay off debt, the cheapest and the easiest to stick with, plus how balance transfers work.
Key terms in Clearing what you owe
- Balance transfer
A balance transfer moves an outstanding balance from one credit card to another, sometimes for a fee. Issuers often promote them with a low or zero promotional rate that lasts for a limited time, after which a higher rate may apply. The cardholder agreement spells out the fee, the length of the promotion and how new purchases are treated.
Source: Consumer Financial Protection Bureau, Credit cards key terms
- Credit counseling
Credit counseling is a service, usually offered by nonprofit organizations, that advises people on managing their money and debts. Counselors may provide educational materials and set up a debt management plan by working with creditors on payment terms. It is distinct from debt settlement and credit repair, which are typically for-profit services with different methods and risks.
- Debt collector
A debt collector is a person or company that regularly collects debts owed to someone else, usually after those debts are past due. The category includes collection agencies, lawyers who collect debts as a business, and firms that buy past-due accounts from creditors. In the United States, such collectors are covered by the federal Fair Debt Collection Practices Act.
Source: Consumer Financial Protection Bureau, Debt collection key terms
Every term on Lever is in the money glossary.
About this module
Clearing what you owe is part of Credit & debt, one of 15 subjects in Lever. It’s a short run of 6 lessons, about 15 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Credit & debt
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1
What a balance actually costs
How credit cards charge interest, when carrying a balance is free, and when it starts costing you every day.
9 lessons -
2
The number they look you up by
What your credit score is, what goes into your credit report, and the habits that move the number most.
8 lessons -
3
What a loan is made of
Where each loan payment goes, the fees hiding outside the rate, and how to compare two offers fairly.
7 lessons -
4
Which debts are worth it
Secured versus unsecured debt, borrowing that builds something versus borrowing that doesn’t, and loans built to trap you.
7 lessons -
6
Changing the deal you already signed
Your debt isn’t set in stone. Negotiating, refinancing and consolidating, and what each one costs.
5 lessons -
7
What the loan actually bought
When a car or a degree loses value faster than the loan shrinks, and how to avoid owing more than something is worth.
7 lessons -
8
Paying in pieces
Buy now, pay later and interest-free instalments: when they’re really free, and when they get expensive fast.
5 lessons
Try this module
It’s part of Credit & debt. Lever will bring it to you when you’re ready, or you can go straight there.