Earned wage access programs in the United States allow workers to take some of their future paychecks in advance and is a growing trend, tripling in three years.
Not everyone is in favor of these programs as high fees and consistent usage have the same dangers as credit cards potentially locking in the most vulnerable wage earners into higher debt, as millions of Americans are already paying for the service.
The benefit to the worker is quick access to payments in order to pay upcoming payments that could be considered emergency funding, but could also prove to be addictive.
The Business to Business model uses a payroll methodology to track a worker’s earnings and can provide access in advance of the earnings. Some employers provide this service as a benefit where the employees have access to the paycheck in advance without a fee with limited use.
Despite the potential dangers, advance access to funds and short term credit card loans are increasing in popularity and new forms will continue to emerge.
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