Choose wisely. There is only one correct answer to each question.
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1.
If you take out $1000 from a payday lender, a credit card, and a credit card cash advance, which will charge the most interest?
The payday lender. By far, the payday lender will charge the most interest. The dollar amount difference between it and the credit cards will be immense. It should be noted that there are also options that are even lower in interest than the credit cards.
2.
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.
3.
Paying off payday loans on time, every time, is a great way to build up your credit score.
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.
Predatory lending can occur with which of the following?
All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.
5.
How might a payday loan affect your credit report?
All of the above. The big three credit reporting agencies don't put payday loans on your report, but there are other ways that the loan activity could show up on your report.