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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.
A payday loan is designed to _______.
Choose wisely. There is only one correct answer.
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.
Which of the following are you forbidden to spend payday loan money on?
Choose wisely. There is only one correct answer.
You are not forbidden to spend payday loan money on anything. There are no restrictions on what you can spend payday loan money on.
4.
If you take out $1000 from a payday lender, a credit card, and a credit card cash advance, which will charge the most interest?
Choose wisely. There is only one correct answer.
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.
5.
If you don't pay back your payday loan, the lender could take you to court and sue you for it.
Choose wisely. There is only one correct answer.
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.