Some appreciated that it gave them access to cash when they needed it, quickly
‘Instant gratification’
NBC News spoke to 12 Earnin users, who had a range of experiences with the app. Others were wary of getting hooked on a cycle of loans and repayments, and some stopped using the app after it caused their bank accounts to overdraft. None had considered when they started using Earnin that what appeared to be a small tip would be equivalent to a high APR.
Kara Eddings, 32, of Big Bear, California, said she has been using Earnin for about 18 months. Eddings, a mother of two children, ages 5 and 6, works full-time as a clerk at a hospital and is also an Instacart shopper to supplement her income. She started using Earnin because she said she had bad credit and couldn’t get a loan elsewhere.
Last year, Eddings got into a tough spot when she borrowed $500 through Earnin while she was on medical leave from work. While she was waiting for state disability payments to kick in, Earnin automatically took its withdrawal of the borrowed money from her account. Unlike more traditional lenders that allow loan extensions in exchange for fees, Earnin always takes the money back on a short timeline.
“After Earnin had taken all of their money out, and then after a couple of bills, I had no money,” she said. “Luckily at the time I didn’t have to go anywhere. The kids – I found a way to get some gas money to get them to school, I borrowed from my grandma, but it leaves you without any options, really. It’s definitely a vicious cycle.”
Another Earnin user, Brian Walker, 38, said that he used the app three times before souring on it. Walker, an engineer, previously declared bankruptcy and doesn’t use credit cards. He lives in Sioux Falls, South Dakota, where short-term lending is capped by law at 36 percent APR.
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