Survey Shows Paycheck Advance Apps’ Popularity Is Rising As 33% Of Americans Are Now Signing Up For A Loan

Cash advance apps can help workers access wages before payday, but they can be as costly as payday loans — and many borrowers can’t repay them

The biggest problem with cash advance options is the very high interest rates. Consumers should avoid “tipping” – it’s a hidden fee and not transparent at all.”

— dr Priya Raghubir, professor of marketing at NYU

AUSTIN, TEXAS, October 18, 2022 / — Americans are struggling now more than ever to pay for their daily expenses. For anyone who needs a boost, a paycheck advance app seems like the ideal solution.

These apps offer cash advances without a credit check. Many do not charge interest, but all charge an optional tip. These apps, which include lenders like Dave, Albert, Brigit and Chime SpotMe, are gaining popularity as an alternative to high-yield payday loans, even as consumer advocates question their transparency. found that out more than 33% of Americans have now signed up for at least one of these advance apps. 95% of this group used them for at least one short-term loan, which many could not afford to repay.

October 31st is World Savings Day. To highlight this, DebtHammer surveyed 786 Americans to learn how many Americans had to use a paycheck advance app. Here’s what we found:

The central theses
Borrowers can’t afford to pay off the advances: Of the cash advance app borrowers, more than 31% have had trouble paying off their loans on schedule. About 17% said they repaid the loan by skipping another bill, while 6% repaid the loan a few days late. Another 4% borrowed from another app to pay off their first loan, more than 2% used a payday loan, and 1.6% defaulted.

Many are previous payday loan borrowers: About 78% of cash advance app borrowers have previously borrowed money from a payday lender.

They don’t solve the underlying problem: Over 22% said they couldn’t borrow enough money to cover their emergency expenses, with more than 10% saying they had borrowed money from more than one app at a time, and 6 % said they combine the money borrowed from the cash advance app with a buy now, pay later plan.

Read the full report below

DebtHammer is an industry leader in the fight to get Americans out of debt.

Please email [email protected] for more information or to schedule a phone or video call with DebtHammer Founder and CEO Jake Hill. You can embed any of the visuals included in the report on your website, or use or edit the raw files as needed. Complete datasets are available upon request.

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