How Apps Like Earnin and Dave Help Avoid Bank Fees

As many as half of American households live paycheck-to-paycheck.

If you’re in this boat, it doesn’t necessarily mean you’re a horrible money manager. Wage stagnation, inflation and the timing of your pay can sometimes meld together to create the perfect storm of financial inconvenience.

When this happens, your options can seem limited. You might think about turning to payday loans or sucking it up and paying an overdraft fee until your paycheck comes in.

Neither are great solutions, but luckily there are some FinTech companies working to address the issue with low-cost or even free services. This allows you to get the money you’ve worked so hard to earn today rather than in two weeks.

Today we’ll take a deep dive into two of the best around: Earnin and Dave.

Earnin

Earnin enables hourly workers to access money they’ve already earned up to $500. The max amount of your 0% interest loan will vary depending on how much you earn in general; Earnin works hard to not put you in a situation where you’ll be worse off after payday than you are now because you’ve borrowed too much from your paycheck.

When it comes time to repay the loan, you won’t have to do a thing. Earnin will automatically withhold the amount you owe from your paycheck.

How to Qualify for Earnin

In order to use Earnin, you’ll have to be paid hourly. The app uses location tracking to determine how many hours you’ve worked over any given pay period, but it can also track your hours regardless of location if you use an online timekeeping service through your employer.

On top of being a hourly wage earner, you’ll also have to get paid on a regular schedule and have your paycheck deposited via direct deposit into your checking account.

Fees

You do not have to pay a dime to access Earnin’s primary services. You are, however, encouraged to “tip” whatever you think the service is worth.

That means you could end up paying anywhere between $0 and $14 every time you borrow against your paycheck, but you have the freedom to choose the amount.

Earnin also has a feature that will automatically send money to your bank account when your balance dips under $100. Known as Balance Shield, this service is meant to help you dodge overdraft fees. You can use it once without tipping, but after that you’ll have to pay at least $1.50 for each use.

Dave

Dave’s primary goal is to help you dodge overdraft fees. It does this by tracking your expenses, like bills and routine shopping, and reminding you of them as they come up.

How to Qualify for Dave

In order to qualify for Dave’s cash advance services, you have to have at least two direct deposits from your employer in your checking account history. This allows Dave to see that you have employment and that the pay is regular.

It will also want to see that you typically have a little bit of money leftover after payday.

The goal with this requirement is to make sure that borrowing money from your paycheck isn’t going to put you in a position where you need to take on debt.

Fees

Dave costs $1/month. For that $1, you get bill reminders and notices when it looks like you’re going to overdraft in the near future. Borrowing against your next paycheck is not included in the $1 fee.

However, getting a cash advance on your paycheck doesn’t come with a hard and fast fee. For this service, Dave uses the tipping model, where tips are encouraged but not required. It incentivizes tipping by planting a tree in Sub-Saharan Africa for each percentage point that you tip. For example, a 10% tip would equate to planting 10 trees.

While it’s good to do good, don’t let the incentives encourage you to get too out of control with your tipping. The entire point here is to dodge fees, and it’s important to remember that these tips boil down to being choose-your-own fees.

Using Apps Like Earnin and Dave with Tiller

If you’re regularly dealing with the stress of overdrawing your account any paying overdraft fees, consider a couple of additional steps to gain control of your financial situation.

• Track your spending for a month or more. As Libby Kane at Business Insider notes, “the best, most critical first step you can take to improve your finances is to track your spending.” It’s very easy to do this in Google Sheets with a Tiller account.
• Once you have a grip on your actual spending, make a simple budget. Here’s everything you need to make a budget in Google Sheets.