Pros & Cons
- May be cheaper than an overdraft fee.
- Can be a low- or no-fee way to borrow money.
- Requires bank account access.
- May promote a habit of borrowing against future earnings.
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Full Review of Dave
The Dave app provides users an advance on their paycheck to cover small emergencies, like a car repair or broken appliance, or to bridge an income gap. The app also offers a “spending account,” which is a checking account that charges no overdraft or low-balance fees.
Dave charges a monthly subscription fee and accepts optional “tips” for the service.
Dave was launched in 2017 from an idea that founder and CEO Jason Wilk had to rid consumers of bank overdraft fees.
“I wanted to build Dave to help be like my financial friend who was going to send me alerts about my upcoming bills and effectively tell me how much money I could spend before my next paycheck came in,” Wilk says.
» MORE: Compare cash advance apps
Is the Dave app right for me?
When used occasionally, Dave’s paycheck advance feature can be useful if you:
Have a small emergency expense.
Can use your next paycheck to cover the money owed to the app as well as your other monthly expenses.
Have a checking account that receives recurring deposits.
Would otherwise overdraw your bank account and pay an overdraft fee, which can cost up to $35.
Dave might not be a good solution if you:
Regularly spend more than you earn.
Want same-day cash that comes with low fees.
Consumer advocates say that regularly paying to access your own money isn’t a sustainable long-term habit. If you need cash for essentials, consider cheaper alternatives first. At the same time, try to build an emergency fund so you can cover unexpected expenses or brief income gaps without paying extra. NerdWallet recommends starting with a goal of $500 in emergency savings.
Keeping a budget is another good way to start saving. NerdWallet recommends the 50/30/20 budget, which helps you balance needs, wants and savings.
How the Dave app works
To get an advance, users are required to set up an ExtraCash account, where Dave says the advance comes from. The ExtraCash account balance starts at $0 and goes negative when you transfer money to your checking account. If you get a $200 advance and transfer it to your checking account, the ExtraCash account will show a negative $200 balance until you repay it.
On your repayment date, Dave brings the balance to $0 by withdrawing money from the checking account where your paychecks are deposited.
Fees and repayment terms
Fees: Dave's fees can be high compared with those of other cash advance apps. They include:
A monthly $1 subscription fee.
An optional express fee from $1.99 to $13.99 to receive funds within an hour (instead of the standard two to three days).
An optional tip of up to 25% of the advance amount.
Repayment terms: When you request an advance, you agree to a repayment date — Dave calls it your settlement date, which is set to your next payday. If you don’t have enough money on that day, Dave may take partial payments from your account until the advance is repaid.
Loan example: Say you immediately need $200 from your next paycheck. If you pay an $8.99 express fee to have the funds sent to an external debit card, the $1 monthly subscription fee and a $1 tip, it’ll cost $10.99 to borrow $200.
Repaid in seven days, that comes out to an annual percentage rate, or APR, of 286.5%, which is slightly lower than what many payday lenders charge but high compared with most traditional forms of credit, like credit cards and personal loans.
What to know about cash advance tips
Wilk says letting users tip rather than charging interest seemed like a fair way to avoid making users overpay to borrow.
But consumer advocates say putting the decision on users doesn’t give them a chance to evaluate the full cost of the product, unlike when seeing a credit card or loan APR before signing.
If you use Dave, NerdWallet recommends not tipping.
How to qualify with Dave
Dave doesn’t check your credit to determine whether you qualify to receive an advance. Instead, the company reviews your bank account for information like your income, account balance and spending habits.
To qualify for an advance, your bank account must:
Be at least 60 days old.
Have at least three recurring deposits.
Have deposits totaling a monthly minimum of $1,000.
Other Dave features
Spending account: When you open an ExtraCash account for advances, you’re also required to open a Dave Spending account, which is a checking account. You aren’t required to fund it, and you won’t get approved for higher advance amounts if you do, according to the company.
There’s no minimum deposit or balance requirement to maintain the account.
Budgeting: Dave has a budget feature that tracks your income and spending to help you plan for upcoming bills and warns you if you’re in danger of overdrawing.
Side Hustle: This feature helps Dave customers find flexible work to earn extra income. Side Hustle includes jobs like rideshare and food delivery driver, and the company says it has work-from-home options.
Dave vs. Earnin
Earnin is another paycheck advance app that accepts tips rather than charging interest. Earnin lets you borrow $50 to $750 and caps tips at $14. The app determines whether to give you an advance by reviewing your hours worked, using information like your location and timesheet.
The app doesn’t charge a subscription fee and offers a savings account. Earnin also offers a free overdraft notification feature and an overdraft protection feature that you may have to pay a fee for.
» MORE: Read NerdWallet’s Earnin review
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