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Personal Finance Courses: Predatory Lending

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1.
All credit cards are a form of predatory lending.
Choose wisely. There is only one correct answer.
False. Some credit cards have very high fees and other predatory features, but many of them do not.
2.
What do borrowers use payday loans for?
Choose wisely. There is only one correct answer.
All of the above. People take out payday loans for many different reasons.
3.
Paying off payday loans on time, every time, is a great way to build up your credit score.
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False. Payday lenders do not report your borrowing activity to the three big credit bureaus, so the activity will not influence your credit score.
4.
As a general rule, which of the following will charge the LEAST amount of interest if you take out a loan?
Choose wisely. There is only one correct answer.
A loan from a bank or credit union. As a rule, these loans have the lowest interest rates and charge the least amount of interest.
5.
You can get a short-term loan from your checking account through what is called _______.
Choose wisely. There is only one correct answer.
Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.