4 Ways I Broke Free From My Dependence on Cash Advance Apps — and You Can, Too

Mixmike / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Cash advance apps can be a temporary fix, but relying on them long-term can lead to more financial stress. Cash advance apps are mobile applications that allow users to borrow money instantly with the click of a button. 

These apps typically offer small, short-term loans, and interest or fees may be attached. If you’ve ever needed extra cash before and used these apps, you know that they can be pretty addicting. When you borrow money from your future paycheck, you’ll receive less money when you get paid — which then leads to another short-term loan. 

I recently sat down with a single mom of three named Tomika Wright. She admits that she got a little carried away with cash advance apps and payday loans. However, she did four key things to stop using cash advance apps. 

Cash Advance Apps vs Payday Advance Apps vs Payday Loans

Before we dive into Wright’s story, it’s important to understand the key differences between cash advance apps, payday advance apps, and traditional payday loans. While all three offer quick access to funds, there are some big differences to be mindful of.

• Cash Advance Apps: These are mobile applications that allow users to borrow small amounts of money with high interest rates and fees. They often require access to your bank account or credit card information for repayment purposes.
• Payday Advance Apps: These are similar to cash advance apps but may have slightly lower interest rates and fees. The main difference is that they partner with an employer or financial institution and can offer advances on upcoming paychecks.
• Payday Loans: These are short-term, high-interest loans typically offered by storefront lenders. They often require post-dated checks or access to a borrower’s bank account to verify your income and for repayment purposes. Payday loans are not available in some states, and the interest rates can be as high as 400%

Wright says she started out using payday loans but transitioned to cash advance apps, which were a little better for her situation but never really provided long-term help or relief. 

“I used to get payday loans through companies like World Finance whenever I had an emergency or serious expense like car repairs,” Wright said. “It was so expensive, and I felt like everything was piled up, and I didn’t have any other options, but it was never a permanent solution for me.”

Wright added that she switched to cash advance apps as an alternative to using credit cards and paying the high interest rate and fees each month but soon found herself in another recurring payment cycle. 

“I got tired of my paychecks being short after taking the advance, but then I sometimes couldn’t make it to the next payday either,” she said. “I got to a point where the best thing to do was to pay off my credit card bills and stop advancing my pay for good.” 

Here are four key things Wright did to meet this goal.

1. Picked Up More Work Hours

Wright knew her main issue was cash flow, so she decided to start working more hours and was grateful to have the option in her field. She works as a Certified Nursing Assistant at a senior care center but discovered that some third-party agencies hire CNAs as contractors to pick up shifts to work at other locations. 

“I joined an agency and downloaded their app to check for available shift opportunities that could work for me,” Wright said. “I’d often pick up two days per week at other facilities that weren’t more than 40 minutes from me so I could make extra money.”

2. Started Cutting Certain Expenses

While earning extra money, Wright also tried to find ways to cut or move expenses around to limit her use of cash advance apps. 

“One of my family members told me about a local food pantry so I started going there occasionally so I could put more money toward my credit cards and other bills,” Wright said. “I also started taking advantage of resale shops and discount days there like the special sales days at Goodwill to buy certain things I needed. I knew it was all temporary, and I was desperate to free up more money so I could save a cash cushion instead of having nothing to fall back on.”

3. Embraced a New Budgeting Strategy

A solid budgeting strategy can help you manage your money more effectively and avoid the need for cash advances. Wright continued to pay close attention to her spending and adopted a method called paying yourself first. 

The pay-yourself-first method is a budgeting strategy that prioritizes saving money before spending on anything else. 

“Once I found out about paying myself first, it was a game changer for me,” Wright said. “My paycheck had always gone to bills and other people before, but it felt nice to keep something small for a rainy day.”

4. Prioritized Paying Down Debt

In addition to committing to paying herself first, Wright also continued to prioritize paying off debt, such as her three credit cards. She tackled one card at a time and set a deadline for when she wanted to pay everything off. 

“I worked hard for several months, but it was worth it,” Wright said. “Once I paid off those cards, I felt a huge relief and could save even more to help me stay away from cash advance apps permanently.”

Share This Article: