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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.
You can get a short-term loan from your checking account through what is called _______.
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Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.
3.
A payday loan is designed to _______.
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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.
4.
Which of the following best describes how payday loans differ from bank and peer-to-peer (P2P) loans in terms of repayment time?
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Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.
5.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
Choose wisely. There is only one correct answer.
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.