Analyze earned wage access and cash advance app terms for hidden fees, "voluntary" tips that feel mandatory, and overdraft traps.
These apps market as "not a loan" but can trap users in expensive cycles. Know the hidden costs.
Tips are "optional" but the app defaults to $5-10 per advance. A $100 advance with $5 tip every 2 weeks = 130%+ APR equivalent.
Need money fast? That's another $3-10 "express fee" on top of tips. Regular advances take 2-3 days, pushing users to pay for speed.
Auto-debits on payday can overdraft your bank if timing is off or paycheck is short. NSF fees from your bank, plus possible app fees.
These apps require full read access to your bank account. They see all transactions, balances, and can make multiple debit attempts.
Many apps require $5-15/month subscription for "premium" features—including higher advance limits or no express fees.
Limits increase as you use the app and tip well, encouraging dependency. Miss a payment and limits drop dramatically.
Paste the app's terms of service to identify hidden costs and risks.