Jason Noble was recently featured on Fortune to discuss cash-advance apps, what you should be aware of when using them and a few alternatives that can provide further benefits.
Cash-advance apps have brought a bit more power to the fingertips of consumers, giving them the option to draw from their upcoming paychecks, often in exchange for a fee. They typically help with paying bills and covering costs for those who don’t have the money to make it to the next payday.
Furthermore, they can be helpful for emergencies, such as car and home repairs that need to be covered immediately as opposed to in the near future. Jason Noble, however, believes consumers need to be wary of the small, hidden details. He says:
“With any of these options, it’s important to know what you are getting into before moving forward. Read the fine print, as that is where you will really know what you are buying.”
The article lists out six options for those looking for a quick way to get cash in advance of their paychecks. While on the surface it might appear that the apps come with minimal or even no fees, the cost of using them can add up quickly due to subscription and overdraft charges, transfer and speed fees, and tips. Though a traditional alternative might be a credit card, Jason notes problems with that approach, saying:
“Someone would use a credit card if they could pay back that debt within a few months, but it can get expensive if not paid off quickly. This is due to the large interest rates usually associated with them.”
High-APR credit cards can make the interest pile up, forcing you to pay more for things that may even be necessities. While often convenient, it can be a good idea to only use credit cards for amounts you’re prepared to repay, helping you avoid the pressure of debt. Jason proposes an alternative to cash-advance apps and credit cards: a home equity line of credit. Otherwise known as a HELOC, these allow you to borrow against your home’s value, then you only pay interest on the total you use. Jason says:
“If you have a HELOC for $100,000, you will not pay any interest on what is not being used. So, if you get into a pinch and need to borrow $20,000, you will only be charged interest for the $20,000. That interest will usually be lower than a credit card, and the payoff term can be longer.”
While cash-advance apps may seem convenient, we’d never advise using them as a long-term solution to a financial deficit. If you often turn to cash-advance apps to make ends meet, it may be a good idea to speak with a financial advisor who can help you budget and strategize with a plan for your funds. PCIA Charleston is always here to help, from the day-to-day management of your finances to long-term solutions for a secure and comfortable retirement.
To read more about cash-advance apps and features you should be aware of prior to using them, you can read the entire article on Fortune.
If you have any questions about budgeting and your financial plan, call Jason Noble and PCIA Charleston at (843) 743-2926.
Don’t miss Clear Picture Financial, Jason Noble’s radio show and podcast each Sunday, where you will learn how you can protect your portfolio and stay on course with your long-term financial and retirement plans. Jason and his team help retirees, those who want to retire early, and business owners who are looking for a work-optional lifestyle.
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