Popularity of Paycheck-Advance apps skyrocketing with 33% of Americans now signed up to borrow, survey finds

Cash-advance apps can help workers access wages before payday, but they can be as expensive as payday loans — and many borrowers can’t repay

The biggest problem with cash advance options is the very high interest rate. Consumers should avoid “tips” – these are hidden charges and not at all transparent. »

— Dr. Priya Raghubir, Professor of Marketing at NYU

AUSTIN, TEXAS, USA, October 18, 2022 /EINPresswire.com/ — Today more than ever, Americans are struggling to pay their daily expenses. For anyone who might need a boost, a payday advance application might seem like the perfect fit.

These apps offer cash advances without a credit check. Many don’t charge interest, but they all charge an optional tip. These apps, which include lenders like Dave, Albert, Brigit and Chime SpotMe, for example, are gaining popularity as an alternative to high-interest payday loans, even as consumer advocates question their transparency .

DebtHammer.org found that over 33% of Americans have now subscribed to at least one of these cash advance applications. Of this group, 95% used them for at least one short-term loan, which many could not afford to repay.

October 31 is World Savings Day. To mark this, DebtHammer surveyed 786 Americans to find out how many Americans had to use a payday advance app. Here is what we found:

Key points to remember
Borrowers can’t afford to repay advances: Among cash advance application borrowers, more than 31% struggled to repay their loans as scheduled. About 17% said they repaid the loan skipping another bill, while 6% repaid the loan a few days late. Another 4% borrowed from another app to pay off the first loan, more than 2% used a payday loan, and 1.6% defaulted.

Many are former payday loan borrowers: About 78% of cash advance borrowers have borrowed money from a payday lender.

They don’t solve the underlying problem: Over 22% said they were unable to borrow enough to cover emergency expenses, with over 10% saying they had borrowed money from several applications at a time and 6% combining money. borrowed from the cash advance app with a Buy Now Pay Later plan.

Read the full report at debthammer.org/cash-advance-apps-survey.

DebtHammer is an industry leader in the fight to get Americans out of debt.

Please email [email protected] for more information or if you would like to schedule a phone or video call with DebtHammer Founder and CEO Jake Hill. Feel free to embed any of the visuals included in the report on your website, or use or modify the raw files as needed. Complete datasets are available upon request.

Jake Hill
+1 214-542-2502
write to us here

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