According to the Financial Health Network, more than 70% of pay-advance users have taken out several advances in a row. Predatory data collection and obscure cash-limit algorithms further affect consumers within this $12B industry.

Why should we care?
While pay advances may work as a short-term solution to one-off cash deficits—and offer an alternative to credit for people without credit scores—they can function in the long run as a band-aid for systemic deficiencies. Low wages are the real problem, says David Seligman, Executive Director of Towards Justice, a nonprofit law firm that serves workers. The paycheck-advance system “basically allows you to get away with paying your workers as little as possible because you can prop up bad employment practices,” he argued. On the consumer side, paycheck advances can force workers to develop unhealthy spending habits that saddle them with debt. Michael Gray, a pest control specialist from Iowa, uses a cash-advance app called Earnin to receive up to $550 before payday. He framed the convenience of these apps as both an accessibility mechanism as well as a trap. “If I need $100 for a bill or my groceries or whatever, it's right there,” he said. “It's quick. It's a few clicks. So it's been pretty effective at keeping me in their ecosystem… I really want to be out.” In response to these developments, the Consumer Finance Protection Bureau (CFPB) has suggested that it will look into paycheck-advance services and consider whether, and how, they should be regulated.