Choose wisely. There is only one correct answer to each question.
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1.
All credit cards are a form of predatory lending.
False. Some credit cards have very high fees and other predatory features, but many of them do not.
2.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.
3.
If you don't pay back your payday loan, the lender could take you to court and sue you for it.
True. Legally, the lender can do that if it wants. Of course, all lenders would rather not have to go that route if they can avoid it.
4.
A payday loan is designed to _______.
Tide you over until your next paycheck. A payday loan is set up to pay short-term bills and to be repaid with your next paycheck.
5.
The interest rates of payday loans are very high.
True. Payday loans have average annual interest rates of 500 percent--or more.