Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Personal Finance How Does the Dave App Work? Updated Mar 09, 2022 3-min read Written by Jeff Gitlen, CEPF® Written by Jeff Gitlen, CEPF® Expertise: Student loans, personal loans, home loans, insurance, credit cards Jeff Gitlen, CEPF®, is the director of content operations at LendEDU. He graduated from the Alfred Lerner College of Business and Economics at the University of Delaware. Learn more about Jeff Gitlen, CEPF® According to research by the Center for Responsible Lending, large U.S. banks took $11.68 billion in overdraft fees out of their customers’ accounts in 2019. It’s pretty staggering to see a number of that size. The Dave app was created as a way to help people avoid overdrafts and the accompanying fees. The Dave banking app raised $13 million in one round of fundraising, and one of the key investors was Mark Cuban. So what are the features of the Dave app and how does the app stack up? How the Dave App Works The Dave app started out as a tool to help everyday Americans receive overdraft protection and automated budgeting. Today, Dave also offers no-interest cash advances, income creation, un-bounceable checks, and more. Some more specifics include getting paid up to two days early, the opportunity to build your credit history, and get up to $100 advances without paying a fee. Don’t worry about fees, either. There are no overdraft fees, no minimum balance fees, and no ATM fees from the 32,000 MoneyPass ATMs in its network. The Benefits The Dave banking app seems somewhat simple, but the features it uses are actually pretty powerful. The app looks at income and spending habits and uses predictive analysis to determine how low a user’s balance could go between the current time period and their next paycheck. The warnings are helpful as well, and the app calculates cash flow each month to show how many dollars came in versus going out. The Dave app is essentially a budgeting app for someone who lives paycheck-to-paycheck. It allows people to avoid not only overdrafts but also gain more understanding and insight into their spending habits. The paycheck advances are also a benefit for some people. The company behind the app had also added a tip feature. If you choose to tip the company, a percentage of what you tip is donated to nonprofit causes. You can learn more about these causes on the Dave website. The Downsides There are only a few downsides to consider with the Dave app. First, it does cost $1 a month to use, and some people might prefer a free budgeting tool. The other possible downside comes with the payday advance element. This might encourage some users to spend money they don’t have, and then they’re going to start each paycheck out with a debt to the app if this becomes a habit. Bottom Line The Dave app is an interesting tool, and it can provide significant benefits, but only for certain people. For example, if you are not living paycheck-to-paycheck, you might not find much value in this app at all. However, if you do live paycheck-to-paycheck, this app can help you save a significant amount of money, and it’s also a simple and convenient way to gain transparency into your spending habits, which can help you make better long-term financial decisions. The app’s design and interface are simple, and it just keeps you very cognizant of what’s happening in your financial life so you can avoid overdrafts and be more empowered financially. It could be a helpful tool for someone who wants to ultimately break their cycle of paycheck-to-paycheck living.