Honestly these microloan apps are arguably less predatory than credit cards because they usually give you three months to pay and don’t charge interest as long as you make those payments.
It’s still absolutely predatory as fuck, but if you are poor credit cards are just way fucking worse.
Right now they probably don’t. Get people talking about how great they are so they get new customers. Then 3 months becomes 1 month and interest doubles. Dont worry they’ll make their money
“The Credit Genie app is free to use and includes interest-free and fee-free advances to help you make ends meet until your next payday. There is a recurring fee of $4.99 per month or $3.49 biweekly for maintaining your bank account connection with our app.”
The effective rate will vary, but given the flat fee the finance charge could be huge. Like if you pay biweekly ($7/month) but only get like $10 loaned
Honestly these microloan apps are arguably less predatory than credit cards because they usually give you three months to pay and don’t charge interest as long as you make those payments.
It’s still absolutely predatory as fuck, but if you are poor credit cards are just way fucking worse.
How do these apps make money then?
Many don’t charge interest, but they do charge a “fee”.
Right now they probably don’t. Get people talking about how great they are so they get new customers. Then 3 months becomes 1 month and interest doubles. Dont worry they’ll make their money
Because people accumulate a balance and don’t pay on time, basically the same way credit cards do.
The payday loan model. I bet they’ll even let you take out a new loan to pay off the one you already have burying you even deeper.
“The Credit Genie app is free to use and includes interest-free and fee-free advances to help you make ends meet until your next payday. There is a recurring fee of $4.99 per month or $3.49 biweekly for maintaining your bank account connection with our app.”
The effective rate will vary, but given the flat fee the finance charge could be huge. Like if you pay biweekly ($7/month) but only get like $10 loaned