Stopping Overdraft Fees: 5 Apps You Should Check Out
The charges for going overdrawn are stiff, you can get burnt for $35 or more just for going overdrawn by a couple of dollars. Worse, with every additional transaction you get charged another overdraft fee. Simply put, you should avoid going overdrawn at all costs and you must get your account back into the black as soon as you can.
Thankfully there are plenty of apps that can stop overdraft fees in their tracks. With people across the US paying $34 billion in overdraft fees through 2017 it is clear that countless Americans need to take action to stop these fees from ruining their finances.
In this article we cover apps that help you manage your money better, apps that let you borrow money quickly for free or at a low cost and even an app that does a little bit of both. We also cover apps that will help you if your borrowing needs are more serious. Keep reading to discover five of the best apps that you can use to stop those expensive overdraft fees.
Keeping your checking account from going into the red in the first instance should be your number one goal. It’s just a matter of managing your money better. PocketGuard helps you do just that, the app connects directly to your bank account and credit cards and analyses your bills and spending habits. PocketGuard tells you how much spending money you have left so you don’t end up overspending and going overdrawn.
What’s great about PocketGuard:
- Essential PocketGuard functions are free
- Easy to set up and use, ideal for those with simple finances
- Can get funds on the same day
Things to note about PocketGuard:
- Doesn’t work if your income is not regular, e.g. freelance income
- Advanced functions require a $4/month or $20/year fee
- Can’t help households or couples manage their finances together
Who should be using PocketGuard?
Everyone, though Dave – see next section – offers some of the same functionality. PocketGuard gives you a live report telling you where your money is going. The app also guides you so that you don’t overspend in any part of the month. This overspend is what gets so many of us into trouble, including overdrafts. Check PocketGuard regularly and you stand a good chance to stay out of the red.
A bit like your ever-watchful buddy, Dave checks your bank account and notifies you if you are in danger of going overdrawn. Even better, if Dave sees you are close to going overdrawn Dave gives you the chance to borrow up to $75 without charging you any interest. Just like PocketGuard, Dave provides some personal financial planning assistance too.
What’s great about Dave:
- Instant, interest-free loans of up to $75, no credit check
- Automatic alerts that tell you when you’re about to go overdrawn
- Clever financial planning features
Things to note about Dave:
- Dave charges a $1/month fee, covering financial planning features and the $75 loan pot
- You need to repay any loans on your next payday
- Loans are only available if you have a steady paycheck
Who should be using Dave?
Though Dave isn’t free, the monthly membership fee of $1 is not a lot compared to other apps that loan you money and far less than the cost of that overdraft fee that follows your $3 coffee charge. If you frequently go overdrawn by small amounts Dave is your friend. That said, Dave’s maximum loan size of $75 is not going to get you very far if you are having a particularly rough month. Thankfully, other apps can offer you a bigger loan.
It is common to experience overdraft crunches as payday approaches. What’s frustrating about that is that you have already done the work, but you simply don’t have the cash. If you’re paid monthly the wait for a salary payment can be excruciating and can lead to high overdraft charges. Earnin can fix you up quickly, and without charging you any interest.
What’s great about Earnin:
- Larger loans of up to $500 per pay period
- No fees, no interest, no charges - tipping optional
- Can get funds on the same day
Things to note about Earnin:
- You need a regular paycheck to qualify for an Earnin loan
- New customers can only borrow $100
- Earnin uses your GPS data to check you’re at work
Who should be using Earnin?
We like Dave because it offers you personal financial advice too, but Earnin is a better option if your overdraft needs are bigger than the $75 on offer from Dave. Earnin is not as good at helping you plan your finances, but if staying out of the red is your prime concern Earnin is a good option. Note the requirements around pay, you can only use Earnin if you are paid directly into your checking account.
Though Dave and Earnin are excellent free options for borrowing there are some people who are unable to use either app. But who do you borrow from if your credit isn’t great, or if your credit file simply won’t handle another credit check? MoneyLion Plus is a good alternative to Dave and Earnin as it provides loans of up to $500 at 5.99% APR without requiring a credit check.
What’s great about MoneyLion Plus:
- Borrow up to $500 at a time at a low APR of 5.99%
- Includes a managed investment account to help you save
- Chance to reduce fees to $0 if you log in every day
Things to note about MoneyLion Plus:
- Requires $50/month investment commitment and $29/month in fees
- Maximum loan capped to $500
- Could cost you about as much as an overdraft if you’re not careful
Who should be using MoneyLion Plus?
As a product MoneyLion Plus is positioned in a slightly curious way, and we’d say choose Dave or Earnin if you can. But MoneyLion Plus can be a relatively affordable way to borrow if neither of those apps work out for you, and if you log in to MoneyLion Plus every day so that you get the $1/day fee credit. There is no financial planning advice included with MoneyLion Plus, but for some people the MoneyLion Plus investment account can be the first real way they save.
5. Speedy Cash
Sometimes life really gets in the way of running your finances smoothly and only a larger loan will do. Speedy Cash provides loans of up to $26,000 depending on which state you live in. The application process is quick, and you should have your money in your account in a couple of working days.
What’s great about Speedy Cash:
- Borrow large amounts, useful if your overdraft gets large
- Considers applicants with imperfect credit histories
- Lends directly, no intermediary
Things to note about Speedy Cash:
- Not available in all states
- High interest rates on all loans
- Could be more expensive than an overdraft
Who should be using Speedy Cash?
We recommend Speedy Cash with caution. You should take extreme care before taking out a high-interest loan, but for some people a personal loan can give the breathing room required to escape a debt trap, avoiding repeated, expensive overdraft fees. If you find you are a couple of thousand dollars in the red every month, paying endless overdraft fees, Speedy Cash could help you get your finances back in shape.
Staying clear of overdraft charges
We’ve highlighted some of the best apps that stop overdraft charges in its tracks and there are also some others to test out. Yet ultimately it is up to you how you manage your money. The key to avoiding overdraft fees is simply better money management, including better financial planning on quicker actions should the worst happen. Always keep an eye on your checking account and use one or more of the apps we recommend. Do this and you stand a good chance of consistently avoiding overdraft fees.