Which of the following is a sign of poor debt management? 1. Creating a budget to manage expenses and pay off debt. 2. Paying only the minimum amount on oredit cards while balances remain high 3. Seeking financial advice to manage debl effectively, 4. Consolidating loans to reduce interest rates.

The answer is **2. Paying only the minimum amount on credit cards while balances remain high.**<br /><br />Here's why:<br /><br />* **Paying only the minimum keeps you in debt longer and increases the total interest paid.** Minimum payments are designed to cover mostly interest, with very little going towards the principal balance. This means your debt decreases very slowly, and you end up paying significantly more in the long run due to accumulating interest charges.<br /><br />Let's look at why the other options are signs of *good* debt management:<br /><br />* **Creating a budget:** A budget helps you track income and expenses, allowing you to allocate funds towards debt repayment strategically.<br />* **Seeking financial advice:** A financial advisor can provide personalized strategies for managing debt and improving your financial situation.<br />* **Consolidating loans:** Loan consolidation can simplify debt repayment and potentially lower interest rates, saving you money over time.<br />