Earnin Makes an Impact on Overdraft Fees

One of Earnin’s foundational principles is a pledge to help our community get to a better place financially. That’s not just an empty promise; our team is constantly looking at how people use the app and what kind of impact it’s having on their lives. While our community is incredibly diverse and includes all kinds of people, there are definite trends in what people use Earnin for and how it helps them. We’re going to look at a couple of these trends, as well as an example showing how Earnin’s features translate into real financial improvements for our community.

Surveys that we’ve conducted show that Earnin community members primarily use the app to help pay for necessities like groceries, rent, and transportation. They also tend to be ambitious and focused on improving their lives in some way, whether that’s by furthering their education, getting a promotion at work, or even starting their own business. In short, they’re making a lot of sensible financial decisions, and they’re using Earnin to help them act on those decisions more easily.

When we looked at our own community spending data, our internal analysis found that if community members made the same purchases but hadn't used Earnin, they would have incurred over $100 million in overdraft fees in June.

As an example of how Earnin helps our community be more financially savvy, let’s look at overdraft fees. Community members can cash out their wages to make sure they have enough in their bank accounts to cover their expenses, and they can enable our Balance Shield Alerts and Balance Shield Cash Out products for more protection against overdrafts.

When we looked at our own community spending data, our internal analysis found that if community members made the same purchases but hadn’t used Earnin, they would have incurred over $100 million in overdraft fees in June. A separate analysis by the money management service Charlie found that their Earnin users are only half as likely to suffer an overdraft compared to their average users. Earnin community members have been able to cover their expenses without having to worry about overdrafts.

In 2017, banks and credit unions collected $34.3 billion in overdraft fees from Americans. To put that in perspective, if you funded a country with nothing but those fees for a year, that country would have the 62nd highest government revenue in the world, just ahead of Ecuador. While normally consumers could save money by leaving their banks and taking their business to financial institutions with more lenient overdraft rules, that’s difficult to do because so many of the largest banks in America have aggressive overdraft policies. There’s clearly a need for a solution, and Earnin is pitching in.

Fighting against overdraft fees is just one way Earnin helps people make good decisions when they’re managing their money. As Earnin expands and comes out with new products, we hope our ability to foster positive financial change in our community continues to grow as well.