Which term describes a strategy to manage debt effectively?

Consolidating high-interest debts is a strategy designed to simplify debt management and potentially reduce the overall interest paid. This approach involves combining multiple debts, especially those with high interest rates, into a single loan with a lower interest rate. By doing this, individuals can lower their monthly payments, making it easier to manage debt without feeling overwhelmed. Additionally, this method can also help reduce the total amount of interest that accumulates over time, leading to a quicker path to becoming debt-free.

In contrast, accumulating all forms of debt can lead to increased financial burden and a greater challenge in managing repayments. Ignoring repayment plans typically results in a worsening financial situation, including potential legal consequences. Maximizing credit card usage generally leads to increased debt, particularly if the balances carry high interest rates without a clear repayment plan in place. Each of these alternatives fails to address the need for effective debt management, highlighting why consolidating high-interest debts is the most sound strategy.