Skip to Content
The cost of debt
Open toolbar

Take the bonus quiz

Test your knowledge. Earn more points. Get started

If you paid 25% interest for a $500 two-week payday loan, what would that translate into as an APR?


It would be an astronomical 650% interest rate if you projected it to a year.

Next question
Which is an example of revolving credit?


A credit card is a great example of a revolving credit account—one where you can borrow and repay the debt over and over.

Next question

You got 2 of 3 correct

You can retake the quiz to maximize your points, but you won't get additional points for questions you already answered right.

Retake quiz

Key Takeaways

Print version

Debt can be about more than just the money you borrowed. Keep in mind how your debt affects things like interest rates and debt-to-credit ratio, so you can make the best choices.

  • Whenever you can, pay more than the minimum on your credit card
  • Carrying a balance on your card can actually help you, but be sure you know your whole credit picture
  • In an emergency, remember to explore lower-risk borrowing options first, like simply negotiating your existing debt to free up cash
  • Unless you have no other choice, avoid high-risk emergency borrowing options, like payday loans or cashing out your retirement
  • Payday loans are one of the most expensive ways to borrow money, with interest rates up to 40-times the interest rates on credit cards