Everybody hates seeing their checking account inch towards $0 as the days toward their next payday seem to drag on. Not only does it mean discretionary expenses are out the window, but the ever-decreasing balance might also make for some financial anxiety.Will a transaction from a few days ago move from pending and drain the account? Will a forgotten subscription suddenly lead to insufficient funds? Will I have to put just $5.00 worth of gas in my car to get to and from work one more day?Of course, creating a cash cushion of $1,000 or more in your checking account can help you get rid of some of this financial anxiety. And raising your income and finding ways to cut expenses can help ensure that you’ll usually have more money at the end of the month.But, if you’re the type of person who worries about overdraft fees, the Dave app could be a good app for you.
Dave is a low-cost banking membership app that offers customers fee-free checking as well as up to $75 in interest-free advances. All you do have to pay is your $1/month membership fee.In addition, when you connect your debit card to the Dave app, it will automatically create a budget for you. The budget can help you predict whether you’ll run short on cash before your next payday.
Dave is a bank, but without all the fees. Dave is currently rolling out a checking account of its own that automatically builds credit by reporting on-time rent payments to the credit bureaus and offers the option to advance up to $100. Dave members can sign up on the checking account wait list to gain early access.The thing that makes Dave special is really the cash advance feature. As a member, you may qualify for an interest-free cash advance of $25, $50, or even $75.If that doesn’t seem like much of an advance to you, I’m happy for you. But you probably don’t need to look too far into your past to remember a day when you couldn’t afford the gas in your car to get to work. Maybe you had a credit card to rely on. But many low-income Americans don’t have access to credit, so a $75 cash advance could be the difference between getting to work and losing their job.
Dave’s cash advance feature is its best feature. However, the automatic budgeting feature is a close second.Unfortunately, if you’ve got irregular pay periods, Dave may not do a great job predicting your account balance. But people with predictable pay schedules can benefit from Dave’s budgeting feature. The prediction feature can help you figure out when you’ll run out of money. Ideally, that will give you a little bit of extra time to make some extra cash.
Dave costs $1 per month, which entitles you to up to a $75 cash advance. If you want the cash advance to be delivered within eight hours, you’ll have to pay a $4.99 express fee.
The one area where Dave doesn’t shine is in its pricing structure. The $1/month fee seems expensive when you may never need the cash advance feature. However, when you connect your debit card to Dave, you may be able to eliminate your $1 fee by shopping at preferred merchants.If you’re a frequent user of overdraft fees, which on average are more than $30, then the $1/month fee will help you avoid these fees. It will also help you set aside the money that you would have spent on overdrafts in order to build up to an emergency savings.Additionally, Dave is a mediocre substitute for a cash cushion or a credit card. A credit card allows you to float expenses for up to 30 days, which could give you an opportunity to “borrow” money without paying any interest (provided you pay your card in full each month).
If you anticipate needing a cash advance, it makes sense to download Dave. It costs $1/month, which is where my hesitation comes in. Then again, if you’re frequently using overdraft fees of $30 or more to cover budget shortfalls, Dave makes perfect sense for you.