PAYCHECK ADVANCE APPS: WHAT TO KNOW BEFORE YOU DOWNLOAD

Paycheck advance apps let users borrow a small amount of their expected earnings, usually in exchange for a small fee, and repay it on their next payday.

It seems like an attractive offer if you need extra cash between paychecks, and millions of users have accepted it. While it’s possible to use these apps without harming your finances, some consumer advocates say they can lead to a cycle of debt.

If you’re thinking of using a paycheck advance app, here’s what to know before you download.

FEES FRAMED AS TIPS

When Jose Polanco uses the Earnin app to borrow from his upcoming paycheck, the app asks him if he wants to leave a tip.

The New York school administrator says he gives the app $8 for the $100 he usually borrows. He says he’s persuaded by the message the app displays that leaving a bigger tip helps pay for users who can’t afford to tip at all.

Optional tips are a common way these apps reframe fees. While usually not required, they’re frequently encouraged.

Earnin CEO Ram Palaniappan says tips let the user decide what the service is worth to them rather than requiring a fee they may not be able to afford.

Some advances come with additional fees. Dave, another paycheck advance app, has three optional fees: a monthly $1 subscription fee, an express fee to get your money faster and a tip.

For a couple hundred dollars — the maximum amount you can borrow from most apps — the fees aren’t as high as most payday loans or overdraft fees.