Consumers are increasingly accessing small short-term loans through digital cash advance and Earned Wage Advance (EWA) online applications. Consumers can receive advance amounts up to $750 per pay period while using these apps. Some companies contract with employers to provide this product while others work directly with consumers. In the direct-to-consumer model, the advances are often marketed as “free,” but providers require a variety of fees to expedite the advance and employ pressure tactics allowing them to collect fees in the form of “tips”. These fees make advances very costly for consumers, with APRs averaging over 330% for some of the biggest companies.

The Center for Responsible Lending conducted an online survey to better understand the usage patterns of EWA and the prevalence of tipping and expedite fees.1 We found that consumers are relying on EWA advances to pay for daily, recurring expenses while losing money on fees and tips. These findings add to a growing body of evidence that suggests EWA products have additional costs and should be regulated to protect consumers.