This App Will Grant You a $ 75 Interest-Free Loan to Avoid Overdraft Fees
There is never a good time for overdraft fees. And of course, when you get one, it’s usually because you didn’t have the money you needed to pay for what you really need, without having to worry about getting extra money.
The simple solution is to simply turn off the overdraft protection in your account (unless you have a savings account to link to). However, this means that your card may be declined. While this is probably just an inconvenience and a little embarrassing when it comes to this pack of chewing gum, if this charging failure is anything more important, then it could be a much more serious problem.
Another hard decision: Dave . Not your college buddy, app.
Once it is linked to your bank account (using the same military grade 128-bit SSL encryption technology used by major banks), the app will track your finances and recurring expenses, and then notify you when you are at risk of overspending your account. … Check.
It doesn’t quite help for that pack of chewing gum, but it might let you know that your cable TV bill will be automatically generated tomorrow and you don’t have enough money to cover it before your paycheck is usually credited directly.
It will also help you fix the problem.
In the app, you can ask to borrow $ 25, $ 50 or $ 75 to pay until your next paycheck. The loans are free, but when you return them, you are given the option to tip 5-15%. For every percentage of the tip, the app will plant a tree. Tipping is not required. It’s a bit like getting a payday loan, but without the big fees.
However, it’s not exactly a free deal: it costs $ 1 a month to use the app. However, if you manage to avoid one overdraft fee for three years, it will pay off on its own.
For someone living paycheck to paycheck (which I have been several times in my life), it can also offer much needed peace of mind. There is nothing better than realizing that you are short of $ 50 for a critical account and knowing that you really have no way to fix it.
Yes, budget is important, and a large budget will help you avoid these kinds of problems. But especially when you’re on a tight budget, even the smallest contingencies can lead to big problems, and $ 1 a month is a hell of a lot cheaper than a payday loan (or dealing with a bunch of overdraft fees).
This story was originally published in 2017 and has been updated with new information on 02/28/2020.