How can the answer be improved? Mark Cuban’s “Dave” Spots You No-Interest Loans To Avoid Overdraft Fees Insane bank charges could become a thing of the past with fintech app Dave, which analyzes spending patterns, predicts.
Overdraft fees are the worst. No one wants to get them, and chances are good when you do it’s not because you were intentionally spending money you didn’t have, it’s because you misjudged how much cash you still had in your account and accidentally bought a pack of gum or something else that’s now resulted in a very expensive trip to the convenience store.
The easy solution to this is to just turn off overdraft protection on your account (if you don’t have a savings account to tie to it). However, that means that your card could potentially get declined. While that’s likely just an inconvenience and a little embarrassing when it comes to that pack of gum, if that denied charge is something more important then it can be a much bigger deal.
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Another solid solution: Dave. Not your buddy from college, the app.
Once it’s tied to your bank account (using the same military-grade 128-bit SSL encryption technology used by big banks), the app will monitor your finances and reoccurring expenses and then let you know when you’re running at risk of overdrafting your account.
It won’t really help for that pack of gum, but it can let you know that your cable bill is auto drafting tomorrow and you don’t have enough money on hand to cover it before your paycheck is typically direct deposited.
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It will also help you correct the issue.
Within the app you can ask to borrow $25, $50, or $75 to get you through until your next paycheck comes. Loans are free, but when you pay them back you’re given the option to leave a 5-15% tip. For every % of tip you give, the app will plant a tree. Tips aren’t required. It’s somewhat similar to getting a Payday loan, but without the hefty fees.
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That said, it’s not entirely a free deal: Using the app costs $1 per month. Still, if you manage to avoid one overdraft fee over the course of three years it ends up paying for itself.
For someone living paycheck to paycheck (which has absolutely been me several times in my life) it can also offer some much-needed peace of mind. There’s nothing quite like realizing you’re going to be short $50 for a critical bill and knowing you don’t really have a way to fix it.
Yes, budging is important and a great budget will help you avoid problems like this. But, especially when you’re on a tight budget, even the smallest unexpected expenses can lead to big issues and $1/month is a heck of a lot cheaper than a Payday loan (or dealing with a bunch of overdraft charges).
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