If you’re short on cash before payday, the Earnin app can help

If you typically run out of money before your actual payday, instead of taking out a payday loan or racking up serious overdraft fees, consider using the Earnin app.

The app enables you to access money from your next check – up to $100 each day and $500 per pay period – without fees or interest.

Sound impossible?

Keep reading to get the details on how you can get a free advance on the money you’ve already worked for.

See related:  6 reasons to avoid payday loans

How does Earnin work?

Earnin calculates the amount of money you can get by determining how often you work and what your salary is.

According to the website, the company believes that “paychecks should be instant, and financial systems should focus on people, not profits.”

You’re probably wondering how Earnin manages to provide this service for free.

Once you get your advance, you “tip” what you think is fair for the service – and if you can’t tip, you simply don’t.

There is a $14 tip limit per withdrawal, but you can give whatever you can afford.

If you’re flush one week and want to pay it forward to the community you can send $14, or if you’re feeling somewhat squeezed for cash you can skip the tip and make it up the next time.

To use the service, you must have a job and get your paycheck automatically deposited into your bank account.

When you request money, Earnin checks how much you’ve worked during that week.

If you’re paid hourly you can upload time sheet pictures for the company to verify, and if you’re salaried, Earnin asks that you allow it to track your commute to your place of work.

Once you get paid, Earnin deducts the amount you requested – and any tip you added – from your check.

So, say you received $100 from Earnin and tipped the maximum of $14 – you would have $114 deducted from your paycheck when it hits your bank account.

But Ted Rossman, industry analyst for CreditCards.com, is skeptical about using Earnin.

“Because these loans are so short term, in a few days, you could easily find yourself right back where you started, and if you add the suggested tip, that’s probably money you could ill afford to lose,” Rossman said.

Setup is simple

It’s easy to set up the Earnin app – either go to the Apple App or Google Play stores and download it on your smartphone or visit the website to put in your number and get a text with a download link.

Once you’ve downloaded the app, all you have to do is create an account, enter your payment info, choose your bank and link to your account.

Earnin will verify your information and set your access limit, and then you can request a loan up to that limit.

You will see the money in your account in one to two business days, according to Earnin.

If your bank participates in the Earnin Lightning Speed program, however, you might be able to get your money in minutes instead of days.

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Use Earnin to help avoid overdrafts

Earnin’s optional Balance Shield can help you stop paying for expensive overdrafts with Balance Shield Cash Outs – Earnin will put up to $100 in your account if your balance falls below $100.

You can also set up a Balance Shield alert and receive a message from Earnin if your balance goes below the amount you choose.

You won’t pay anything the first time you get overdraft protection and going forward you can choose the amount you tip for each Balance Cash Out.

Use Earnin to pay your medical bills

Earnin also provides users with novel ways to pay their health care bills.

You can send in a snapshot of your bill and let an Earnin Health Aid agent negotiate it for either better payment terms or a bill reduction.

You’ll get a report that details a list of your payment options and as always, you tip what you choose.

See related: Should I get a new credit card for medical emergencies?

Get cash rewards from Earnin

Earnin’s Cash Back Rewards program enables users to earn up to 10% cash back on dining and purchases at eligible merchants.

All you have to do is join the Earnin Community, enroll a debit or credit card (to earn rewards with a debit card you must run it as a credit transaction at checkout), browse participating offers and make a purchase.

Once your purchase clears, your rewards will go into your Earnin account, and you can redeem them within a few days.

As soon as you see your rewards in your account you can send the cash right to your bank account.

How safe is Earnin?

It might make you a little nervous giving both your bank information and your work schedule to any service, particularly if you’re allowing it to track your commute.

In February 2019 Earnin discovered that some bank transaction data had been exposed, but the issue was quickly resolved and no data had been stolen, according to the company.

Earnin takes care of your sensitive information in a number of ways: It uses 256-bit data encryption to secure your data, complies with U.S. privacy and data security laws and never stores your bank login information.

It also provides users with secure server locations and conducts routine audits to identify any safety issues.

“Reading the terms of service, there is nothing glaring that would concern me,” said Robert Siciliano, CEO of Safr.Me.

“What is missing from the setup process or the login process is two-step (or two-factor) authentication,” he added.

Siciliano said most peer-to-peer payment apps or banking apps involve some form of two-factor authentication or at least have it as an option.

He also said that for Earnin, the lack of two-step authentication isn’t a deal-breaker, but at the minimum the user should also password-protect their mobile device.

Looking at the financial institutions and banks that Earnin is affiliated with, you know that they have been vetted for security purposes, according to Siciliano.

“None of these banks would allow this app to connect with them if they hadn’t already been fully scrutinized,” Siciliano pointed out.

Does Earnin work with your bank?

According to its website, Earnin works with a number of banks. See if yours is listed below:

• Bank of America
• BB&T
• BBVA Compass
• Capital One
• Chase
• Citibank
• Fifth Third Bank
• Huntington Bank
• JP Morgan
• Navy Federal Credit Union
• PNC Bank
• Regions Bank
• Simple
• SunTrust
• TD Bank
• USAA
• US Bank
• Wells Fargo
• Woodforest National Bank

An expert’s bottom line on Earnin

Rossman said that while Earnin could potentially save you money by giving you early access to some of your pay without fees, it’s not something that you should use habitually.

He believes there’s really no substitute for emergency savings when it comes to improving your financial security and helping you sleep better at night.

“Take on a side hustle, sell unneeded possessions and cut expenses to provide yourself with a future buffer against incurring high-cost debt when unexpected expenses arise,” Rossman said.

See related: 7 simple ways to create an emergency savings fund