Pay Advance Apps May Be Costlier Than Workers Think

More workers can now use pay advance apps for quick cash to cover expenses between paychecks. The apps may offer no-cost options, but most users end up paying fees that can total hundreds of dollars a year, a new analysis finds.

“They are not free in the vast majority of cases,” said Candice Wang, a senior researcher at the Center for Responsible Lending, a nonprofit consumer advocacy group, and a co-author of a report published on Friday on the real cost of pay advance apps.

Pay advance apps, also known as “earned wage access” or “on-demand pay” tools, let workers get part of their earnings early to tide them over until their full paycheck arrives. Most borrowers earn less than $50,000 a year, a 2023 government report found. Workers can use the funds for any purpose, whether a car repair or basics like groceries. A 2024 case study of restaurant workers found that the most common reasons for taking an advance were food and rent.

“People are struggling, and it’s hard to make it paycheck to paycheck,” said Lauren Saunders, a senior lawyer at the National Consumer Law Center.

Article source: https://www.nytimes.com/2026/10/02/your-money/pay-advance-apps-fees.html