We all struggle with making ends meet, especially in our current economy, when most businesses are on the brink of bankruptcy. Getting paid every other week can put a strain on our finances, especially when bills are due at the beginning of the month.
It would be much easier to budget our money if we were paid on a weekly basis. However, According to the U.S. Bureau of Labor Statistics, only a small percentage of Americans are paid weekly. In reality, only 30% of workers receive a paycheck each week. The rest of us must wait every two weeks, and in some cases – monthly!
There is where paycheck advance apps make all of their money. They realize you may need access to the money you have already earned before payday . Unfortunately, the traditional payday model promises to help you ruin your finances rather than get them back on track.
Especially with some regulated states allowing annual percentage rates to reach %, it’s an incredibly unethical business model that pushes people living paycheck to paycheck even further into debt. For the states that do not regulate payday loan companies , the average annual percentage rate is 391%!
Luckily, fintech continues to break the mold of these archaic traditional paycheck advance companies and offer reasonable and affordable solutions to the delayed employer payroll systems.
By removing the brick and mortar stores, payday advance apps are able to supply customers with much-needed cash without charging extremely high interest and unnecessary fees.
Payday Advance Apps – An Overview
Fintech has a new way of getting you your hard-earned money when you need it most. In a best-case scenario, you can wait until your next paycheck and can cover the bills until then. However, if you have a financial emergency that requires immediate funds you don’t have, a payday advance can be a great option to keep you from charging additional debt on a credit card.
Think of a payday advance as a way to get you the money you have already earned – faster. It’s not a loan in the traditional sense that you pay interest depending on how long it takes you to pay it back. Payday advance companies only allow you to get an advance on about half of your guaranteed paycheck to keep you from overspending.
If your check is going to be $1,000 and you need $500 for a car repair, the payday advance app will give you the $500 when you need it most. When the time comes for your paycheck to hit your account, the payday advance company will take back the $500 you took from them, and deliver the remaining $500 into your account.
You do not pay interest on the money you receive ahead of time-no more paying an additional 34% on your own money and additional fees to a payday loan company! However, we all know there is no such thing as free money, so we will discuss how fintech makes their money.
How Payday Advance Apps Can Help – And Hurt Your Finances
Keep in mind, the best way to manage your money is to have an emergency fund to cover unexpected financial crises. By combining a monthly budget with properly funded emergency savings, you should seldom, if ever, need a payday advance.
However, if you are just starting on your financial independence and debt-free journey, sometimes we all need a little help to get back on our feet. This is where being provided your hard-earned money a few days early can help you succeed. Rather than taking out a loan and paying interest, these payday advance apps can offer you the support you need.