How to Protect Yourself – 10 Steps to Avoid Loan Shark Apps

Here are 10 steps you can take to protect yourself and your finances.

Step 1: Ask "What Is the APR?"

Do not accept "we don't charge interest" as an answer. Calculate the true annual percentage rate by adding up every fee – membership, express, overdraft, tip – and comparing it to the amount you receive and the time you have to repay.

Step 2: Read the Subscription Terms

Many of these apps charge monthly fees just for the privilege of using their service. Know what you are paying and how to cancel – before you sign up, not after.

Step 3: Test Cancellation Before You Commit

Before you take an advance, try to find the cancellation button. If it is hidden or requires a phone call, that is a red flag. If you cannot figure out how to cancel, do not sign up.

Step 4: Ignore the "Up To" Number

Assume you will get the minimum, not the maximum. If you need $500 and the app advertises "up to $500," have a backup plan. Most users get far less.

Step 5: Compare with Real Alternatives

Before using a cash advance app, check:

• Can your employer give you a salary advance? (Often 0% interest)
• Does your credit union offer small-dollar loans? (Often under 20% APR)
• Can a family member help? (May be awkward but cheaper)
• Do you have anything you can sell? (One-time pain, not ongoing debt)

Step 6: Check Regulatory Actions

Before using any lending app, search for "[app name] lawsuit" or "[app name] FTC" or "[app name] settlement." If regulators have taken action against the company, that is public information. Use it.

Step 7: Understand Your State's Interest Cap

Many states have laws capping interest rates on consumer loans. For example, Maryland caps at 33%. If an app is charging effective rates above your state's cap, they may be operating illegally.

Step 8: Read 1-Star Reviews

App stores are full of fake 5-star reviews. Sort by "lowest rating" and read what actual users are saying. Look for complaints about hidden fees, impossible cancellation, and debt cycles.

Step 9: Be Wary of "Free Money" Claims

If an app promises "free money" or "cash for nothing," ask yourself: how do they make money? The answer is never "they are just being nice." They make money off you – either through fees, data, or both.

Step 10: Report Predatory Practices

If you have been harmed by a predatory lending app, report it to:

• The Federal Trade Commission (FTC) at ReportFraud.ftc.gov
• Your state attorney general's office
• The Consumer Financial Protection Bureau (CFPB)