So many of us live paycheck-to-paycheck, with no margin for error. We know what it’s like to see your checking account balance drop closer and closer to $0.
If you’re in this boat, we found a service that can help you avoid two of Codetic’s pet peeves: overdraft fees and payday loans.
It’s an innovative app called Brigit, and more than a quarter of a million people are already using it.
It’s designed to protect you from paying expensive overdraft fees or taking out shady payday loans. If you’re in danger of overdrafting your bank account, Brigit will quickly loan you up to $250 — just like that.
You can request an advance anytime you have an unexpected expense, and Brigit will instantly deposit the money into your account. It’s not complicated — you just open the app and tap on your phone.
Or, like a lot of Brigit’s users, you can authorize the app to keep an eye on your bank account for you, and to automatically deposit a cash advance if you’re running low. That way, you can spend less time and stress worrying about overdrafts. You’ve got an automatic safety cushion now.
There are no late fees or interest charges. Instead, Brigit is a subscription-based service with a monthly membership fee — normally $9.99, but Penny Hoarders get a special rate of $7.99.
Imagine how much it could save you. If you overdraft your account by a measly $5 or $10, most banks retaliate by charging you a fee of $35 or so. Banks make a lot of their money this way.
Here’s How This App Has Your Back
If you have an emergency and need cash fast — or if you’re on the verge of overdrafting — Brigit can put money in your account immediately.
This is a cash advance, a short-term loan, and you pay Brigit back when you get paid. The app deducts your repayment from your bank account on payday, and it notifies you 24 hours in advance that it’s going to do that.
But if it turns out you need some extra time, Brigit’s got your back. If you’re still running low on cash, it allows you to extend your due date without paying any late fees. You can push back your due date up to three times.
Also, you can only get one cash advance at a time. You qualify for another advance as soon as you pay Brigit back.
According to the reviews, a lot of users like the option of having Brigit automatically help them avoid overdraft fees if their bank account is running low.
More than 250,000 people are using the app now, and it’s getting good reviews and has higher than a 4-star rating in both the iPhone’s App Store and on Google Play. (As of May 17, 2019.)
A Smart Payday Solution
You don’t need to have good credit to qualify for Brigit, although you do need a steady job. You’ll need to be able to show that you get recurring direct deposits from an employer.
Short-term loans aren’t necessarily meant to be a long-term solution to your financial needs. Ultimately, to avoid the trap of overdraft fees and payday loans, you’ll want to put yourself in a position where you’re earning more, spending less or both.
In the meantime, Brigit makes for a useful safety net for a lot of people.
Did you know that more than 10% of consumers ages 18 to 25 incur more than 10 overdraft fees per year, according to CNN Money? At the $33 average reported by Bankrate, that’s nearly $350!
And payday loans, instead of being a quick fix, can suck you into a cycle of debt with interest rates of more than 300%.
Almost 70% of payday loan borrowers take out a second payday loan within a month. This cycle can turn a short-term loan of a few hundred dollars into a growing mountain of debt totaling thousands of dollars.
According to the Consumer Financial Protection Bureau, the average repeat borrower pays more than $450 in fees on top of their principal over the course of a year.
Given all that, Brigit might be a smarter choice for you if — like so many of us — you’re living paycheck-to-paycheck and you’re operating on a thin margin.
If you’re stressed about overdrafting, it can offer you peace of mind.
Mike Brassfield ([email protected]) is a senior writer at Codetic. He knows all about living paycheck-to-paycheck.