NASHVILLE, Tenn. (WTVF) — The holiday season is finally coming to an end, and it’s time to get back on track financially. Maybe you overspent or found yourself with an unexpected bill while on vacation.
Some people use cash advance apps to make ends meet. But before we do that, here’s a buyer’s do’s and don’ts guide to help you understand exactly what you’re getting into.
“Cash advance apps are a way to get short-term loans before your next payday and are a way to help fill that gap,” said NerdWallet’s Sarah Lassner.
There are advantages. You may be able to get your money quickly. Fees are usually not very high, are clearly stated upfront, and no credit check is required.
“Be very careful with these cashback apps because while the fees aren’t as high, they still exist and can be an expensive way to access your money compared to other borrowing options. ,” Lassner said.
When it comes to pricing, many of these apps either require you to pay a one-time startup fee or a monthly fee.
In addition to that, there are fees for borrowing money itself. The faster you need the cash, the higher the fees may be.
Some of these apps have started asking for tips, from $0.99 to just over $20 and even weird stuff. However, this is optional and you can opt out.
If you don’t want to use cash advance apps, Lassner says you can consider credit cards that offer 0% interest promotions. Or if you really don’t want or can’t take on new debt.
“If you’re struggling to make ends meet, it may be worth having a tough conversation with your loved ones about whether you can cut back on your vacation plans,” Lassner said.
The bottom line is that cash advances are great for making money quickly, but they can lock you into a cycle of debt you can’t escape. So renters beware.
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