Debt Traps to Avoid — Practice Questions

Debt Traps to AvoidCredit and Borrowing — Predatory products and patterns that keep people stuck.Some borrowing products are designed to keep you stuck. Recognizing them is the best protection.

Payday loans: tiny short term loans with sky high fees, due on your next payday.

Car title loans: use your car as collateral at very high rates.

Minimum payments: leave most of the balance accruing interest for years.

Predatory lending: Lending with unfair, deceptive, or abusive terms that exploits borrowers, often with hidden fees and pressure to sign fast.Before signing anything, read the terms, including the APR and every fee. An emergency fund is the best alternative to high cost borrowing.11 practice questions with explanations. Free, and no account is needed to start.