Some Workers Are Turning To Pay-Advance Apps for Basic Expenses (nytimes.com)
- Reference: 0179683876
- News link: https://news.slashdot.org/story/25/10/06/1938255/some-workers-are-turning-to-pay-advance-apps-for-basic-expenses
- Source link: https://www.nytimes.com/2025/10/03/your-money/cash-advance-apps-workers-expenses.html?unlocked_article_code=1.rU8.1aTS.9Ai74MUvhcrk
> Pay-advance apps are marketed as a way to help workers living paycheck to paycheck pay for unexpected expenses, but workers are often using the apps to [1]manage basic expenses like groceries, rent and other needs , a new report found. The tools, consumer advocates say, can carry costs akin to those of traditional payday loans.
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> An [2]analysis of anonymous data found worrisome behavior among users of the apps, including quick increases in the number of advances, advances from multiple apps at the same time and more frequent bank overdraft fees. "These findings reveal persistent patterns of financial strain that raise serious concerns about the long-term effects of these loans," said the report from the Center for Responsible Lending, a nonprofit consumer advocacy group. The group analyzed data from SaverLife, a nonprofit that promotes saving and sound financial practices among people with low or moderate incomes. The analysis found that heavy users of the apps paid $421, on average, in total loan and overdraft fees over a year, or almost triple the average paid by moderate users.
[1] https://www.nytimes.com/2025/10/03/your-money/cash-advance-apps-workers-expenses.html?unlocked_article_code=1.rU8.1aTS.9Ai74MUvhcrk
[2] https://www.responsiblelending.org/research-publication/escalating-debt-real-impact-payday-loan-apps-sold-earned-wage-advances-ewa
Is basic personal finance still taught in school? (Score:3)
Because it sure doesn't look like it. Are parents even bothering to teach their children or are the parents also too busy failing at their own simple budgeting technique?
I guess when it's someone else's money, it doesn't matter if you spend a little bit more since you can't pay it back anyway.
Value of money:
. < -- we are here.
broader issue of what we should expect from societ (Score:2)
No amount of careful budgeting changes that everywhere you look, some business is trying to pick your pocket. They poorer, busier, or less educated then the more of a target you are for these parasite businesses.
Offering the legal status of incorportation is a priviledge. If a whole industry is abusive then what is the benefit to society in letting them to continue to exist?
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There are plenty of people who simply make poor financial decisions.. there are also a large number of people out there that work hard and can never get ahead because wages have not kept up with inflation in a very long time.
Then there are those who make good decisions but are ruined by health care costs because one family member is diagnosed with cancer.
If our government wasn't so hell bent on siphoning even more wealth to the top, maybe we could re-create the middle class.
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Your "basic personal finance" hasn't been taught in most schools in the Untied States since at least the 1970s, the only place where I ever saw it when I was in school ('79 grad) was in 'Home Economics' class. Even our accounting classes didn't teach about budgeting except as a mandate which would be given to you by management.
IMNSHO a certain share of the blame goes to our current reliance on credit cards, and that their usage starts so young. Any time I've been poor I've always relied strictly on cash.
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It's easy to lose track or simply not even care when it's just a number on a screen backed by debt.
I agree about the cash advantage for keeping within budget - when the wallet is empty you ran out of budget. Part of the reason why all the big money people are pushing for a cashless society.
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Oh you’re absolutely right I quit buying $5 daily avocado and now I have no problems paying $2k a month for an apartment or $300k McMansion.
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Research shows that poor people make poor decisions. You can try to explain it by lack of opportunities, stress, etc. but that does not change the fact that people that tend to be in a financially stressful situation also tend to make poor, short-term oriented decisions.
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When rents are going up at a much higher rate than incomes, no amount of budgeting will help.
Searching by your comment no (Score:2)
Because if you had been taught basic personal finance you would know you can't squeeze blood from a stone and that somebody making $20 an hour takes home at best and with an unreasonable work week 3,500 a month in a country where a two-bedroom apartment rents for $2,000 and car ownership is mandatory for employment except in a few of the most expensive cities where you can basically double that rent figure.
You can't squeeze blood from a stone and you can't magically budget your way out of late stage cap
And this is different from credit card abuse how? (Score:3)
Seems like people falling to the same old financial traps for the financially irresponsible and/or poor and desperate, just with another facade and way of access.
In the end you still have to pay with interests, or else.
uh no (Score:3, Interesting)
"These findings reveal persistent patterns of financial strain that raise serious concerns about the long-term effects of these loans"
No, these are the long term effects of crony capitalism. The loans are more symptom than problem. The people taking them out to meet basic needs are already facing the real problem. They are broke in a society that is happy to let you die if you are poor.
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And unfortunately usury seems to be the most widely accepted solution.
I've only faced financial security once in my life, I was young (was I even 21 yet?), I had just been laid-off as the doctom bubble burst, and that weekend my vehicle was stolen and per my folks' advice I only had liability coverage. Filing for unemployment covered my rent, my lack of vehicle meant I could cancel my auto insurance since obviously I didn't need it anymore, and my parents loaned me a car and covered food and utilities unti
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More often than not you'll find the politician-mandated auditing costs more (often FAR more) than the fraudulently gained abuses ever did. The exception of course is the Pentagram, where the situation is reversed.
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> They are broke in a society that is happy to let you die if you are poor.
This is exactly why we have obesity epidemic, including among poor.
In the state where I live (Score:2)
Landlords can (and do) raise rent 13% a year, by law.
Your employer has to give a cost of living pay increase of 2.5% a year, by law
So by law, there's going to be 10.5% discrepancy between the money going out to keep a roof over your head, and the money coming in if you live in the same place (and that's just accounting for your roof. And god forbid you have to move, as rents go up much more than 13% per year)
And yet, people being broke is news to some (or worse, blamed on the broke people themselves)
Whimpy (Score:2)
I'll gladly pay you Tuesday for a hamburger today
WINNING (Score:2)
ALL THIS WINNING!
Grocery loan (Score:2)
We are at the point where people are so broke they are borrowing money for groceries.
This is actually nothing new but the food banks used to be better funded so those people could get enough food to get by without going into debt for it.
There is of course in abundance of food.
"Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses
Shitty advertising also doesn't help (Score:2)
One of the ads that I see often is of a college kid wanting to get candy out of a vending machine...he borrows a bunch of money from one of these apps, and then is feeding benjamins into the vending machine and then gorging himself on a pile of candy and junk food. Although, the commercial is light on how using the app suddenly presented him with a stack of twenties to use at the machine...
Now, if he's really that poor, he can spend 3 years paying it back at 500% interest.
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> If you do, ban services like this one.
> If not, don't ban such services.
These services exist to prey on those who have less income to begin with. Maybe the solution isn't to continue cracking down on ways poorer folks try to survive, but instead find a way to prevent people from feeling so desperate to make ends meet that they go to the legally sanctioned loan sharks just to make it paycheck to paycheck. I know, crazy talk in a capitalist utopia, but maybe we can turn our crazy from outright hatred to something a little more long-term practical? Just as a thought experiment at
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> The country has no problems paying $100k for ICE agents to snatch people into rental vans. The country has money to build camps to house these people. When it comes to citizens that need help it’s fuck you.
Lest we forget: There's also always plenty for another tax cut for businesses and billionaires.
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> The country has no problems paying $100k for ICE agents to snatch people into rental vans. The country has money to build camps to house these people. When it comes to citizens that need help it’s fuck you.
The United States welfare budget totaled $1.048 trillion in fiscal year 2024, or 16% of all federal outlays.
That's a LOT of "fuck you".
[1]https://federalsafetynet.com/w... [federalsafetynet.com]
[1] https://federalsafetynet.com/welfare-budget/
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Do you have an examples of what these long-term practical solutions might be or is it just wishful thinking? Some people can certainly be taught the financial planning skills that they might lack which are putting them in this position, but if there were effective methods of addressing poor impulse control, addiction, and many other underlying causes that put people in this position someone would have found them by now.
You could always start a business to lend money to these people on less predatory term
I doubt that I hate poor people (Score:2)
Can we provide better public services, as well as imporve banking and rental regulation, then ban money lending or advance services that have unfair rates?
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I wouldn't ban the businesses, just cap their fees and the exorbitant interest rates that they (and the payday loan places) are allowed to charge. Of course when you have congresscritters and high party execs personally invested in that industry we all know that it's not going to happen.
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If poor people don't have loan options like this one, they go to loan sharks.
If you don't pay back payday loans, you ruin your credit. If you don't pay back a loan shark, you get your legs broken.