Personal Finance News
Chime Introduces MyPay Cash Advance Feature
The popular neobank Chime is adding a new feature that will allow users to access their paycheck funds even earlier.
About MyPay:
This week, Chime announced the launch of MyPay. With this new feature, customers will be to request up to $500 of their pay ahead of their regular payday. As Chime notes, MyPay is a low-cost and transparently priced alternative to traditional payday loans and other options.
Chime users with direct deposit can request MyPay advances for a flat fee of $2 per advance with no monthly fee or interest. Alternatively, if their payday is within two days, members can request a free advance. While the minimum amount they can request is $20, the maximum amount will depend on the member limit that Chime sets for each user (what the top cap of $500). Once a request is approved, MyPay funds will instantly be transferred to a customer’s Chime checking account.
Currently, Chime has opened a waitlist for interested and eligible customers and says that onboarding will begin soon. At launch, the feature will only be available to those in select states (AL, AK, AZ, CA, DE, DC, FL, IN, KS, KY, LA, MI, MS, MO, NE, NH, NY, OK, PA, RI, TN, TX, UT, VA, and WV). Customers can move up the MyPay waitlist by either referring friends to Chime or, for those users who don’t already have direct deposit setup with the neobank, adding a qualifying direct deposit of at least $200 a month will also move them up.
What they’re saying:
Announcing the new MyPay feature, Chime CEO and co-founder Chris Britt stated, “For far too long, payday has come on a fixed schedule. For the 60% of Americans living paycheck to paycheck, getting paid that way doesn’t always work. Two-week pay cycles are outdated, and people need good ways to access money between paydays.”
He continued, “We are proud to offer people greater control over their pay and lead the way in transforming how people get paid in America. Chime believes everyone deserves fair and responsible access to their hard earned money when they decide, without the fees and interest associated with other products.”
My thoughts:
At a cost of $2 per advance, Chime’s MyPay may sound like a good idea. However, while a $2 fee on a $500 advance isn’t bad, $2 for a $20 advance is far less appealing. Thus, while the transparent pricing is nice, members will likely want to see what their borrowing limit is before deciding whether or not to take an advance. Furthermore, customers should strive to make these advances as rare as possible rather than relying on them just because they’re accessible.
With that said, Chime’s MyPay does sound like an overall positive alternative to other cash advance options. Therefore, I’m mostly glad that it will exist and look forward to seeing more details about it.
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