After teasing a change on social media, the neobanking app Current has announced an update to its Paycheck Advance feature.
About Current’s Paycheck Advance Increase:
Following an update, Current customers will now be able to request an even larger advance on their paychecks using the platform. Now, users can qualify for up to $1,000 from the Paycheck Advance feature — up from the previous top limit of $750.
To get started with Paycheck Advance, Current customers must first receive at least $200 in eligible payroll direct deposits per month. Additionally, Current states that they consider a variety of factors such as direct deposit history, account activity, income verification, and more. Over time, the amount of money that customers can request via Paycheck Advance may change. Users can check their eligibility by visiting the Current app, going to the Overview tab, and selecting the Paycheck Advance feature. Note that no credit check is required to use this feature.
With Paycheck Advance, there are no mandatory fees. However, customers do have the option to pay a fee in order to gain instant access to requested funds. Alternatively, customers can select regular access for no fee, with funds arriving within 3 calendar days.
As Current notes, Paycheck Advance is unlike regular payday loans. In fact, while Current’s option has no mandatory fees or interest, payday loan products can carry APRs of 300% to 800%.
Other Paycheck Advance Options:
Current isn’t the only banking platform that’s made paycheck advances a core part of its product. For example, Varo (a neobank turning bank) offers a Cash Advance program that eventually offers access to up to $700. However, while Varo offers instant delivery for Cash Advances, it does charge a fee for each advance. These fees range from $1.60 to $100, depending on the requested amount.
Elsewhere, the top neobank in the United States, Chime, also offers payday advances through its My Pay feature. This option boasts limits of up to $750 and offers fee-free funds access within 24 hours. Instant access is also available for a fee that ranges from $2 to $5.
My Thoughts:
Admittedly, it wasn’t until I put together that last section that I realized how different these three similar features actually are. With Chime having the upper hand on paper, perhaps that’s why Current is hyping its new higher limit. Of course, as stated, customers cannot simply sign up and reach that $1,000 limit right away. Instead, it could take months for them to qualify (if they do at all).
Looking ahead, with this latest update from Current, we can likely expect the cash advance arms race among FinTechs to respond in due time. Will this be a benefit for customers, though? We’ll have to wait and see.
