One of the many reasons you may look at a payday loan is you need money immediately to pay bills for some other financial emergency. Cash advances often have hefty fees that make them an expensive and risky option. With this in mind, many technology companies have emerged to try and find a way to serve customers who might otherwise turn to payday loans. Activehours is a new app that offers hourly workers immediate access to their earnings.
Rather than waiting to receive your paycheck, Activehours connects to your bank and uses timesheet information provided by you or your employer to give you the option to withdraw money immediately after working a shift.
You can withdraw up to $100 a day using Activehours. Then, when you’re paid, Activehours will debit your account for the money you withdrew. The maximum you can deduct each pay period depends on how much you earn, your financial behavior and when your bills are due. All users start with a $100 limit, but good financial behavior can result in your limit increasing to $500.
There’s no interest or fees to use this service, but you do have the option of tipping the company. While the tipping is optional, it can add up. A $10 tip on the maximum amount of $100 ends up being comparable to the amount payday lenders charge on their loans, so be judicious with your tips. While it may seem like a small amount when you get your advance, when your paycheck comes and those tips are deducted, you can see how they add up.
Activehours offers a Balance Shield feature to help you avoid over-drafting your account. If you opt to use Balance Shield, $100 will be sent to your bank when your account drops below $100. This counts against your daily and pay period limits. Balance Shield is free the first time you use it, but you’ll be required to tip a small amount every other time you use it.
As a payday loan alternative, Activehours may be worth considering if you need a cash advance to meet an unexpected expense and haven’t been paid yet. A small tip on an advance through this app is less costly than the fees charged by payday lenders. If you need payday loan because you aren’t earning enough to pay your bills, Activehours isn’t the best option and you may want to explore enrolling in a debt management plan offered by a credit counseling agency.