Test your knowledge

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All credit cards are a form of predatory lending.

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True

False

False. Some credit cards have very high fees and other predatory features, but many of them do not.

A payday lender does not legally have to identify the fees charged to your payday loan.

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True

False

False. By law, a lender must spell out all fees to you in your contract.

If you don't pay back your payday loan, the lender could take you to court and sue you for it.

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True

False

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.

When you take out a payday loan, how long is the grace period for paying it back?

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Two weeks

One month

Two months

There is no grace period.

There is no grace period. Payday loans do not offer grace periods; you must pay them back on your payday or you will be charged late fees.

The interest rates of payday loans are very high.

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True

False

True. Payday loans have average annual interest rates of 500 percent--or more.

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