Do You Need the Dave App for Summer Fun?

Lender sets up gambling game to encourage borrowing

Andy Spears


Email promotion from the Dave App

The Dave App’s cartoon bear is no stranger to using games of chance to encourage risky borrowing.

In the latest promotional email from the app-based lender, borrowers can be entered for a chance to win a cool $2000 in the heat of the summer.

All you need to do is check your account — and see how much they’d let you borrow.

Of course, the hope on the part of that seemingly friendly bear is that you’ll then take out a small summer loan. You know, maybe for a fun weekend with friends or a short family trip.

Plus, just by checking, you could add $2K to your summer slush fund.

Of course, what Dave doesn’t mention is the ridiculous interest rates and cycle of debt that are both key features of their lending model.

A story from the L.A. Times digs deeper, explaining just how bad the fees associated with friendly, cartoon bear apps can be.

Here’s how the Times broke down the fees associated with a loan from Dave:

Given that the money had to be repaid in 12 days, the $5.99 fee and $2 tip, if considered as interest, cost Goad 122% on an annual percentage rate basis — a metric that helps compare the relative cost of loans. If he tipped $6.93, the company’s average in the first quarter, it would amount to an APR of nearly 200%. If he chose a 15% tip, the total cost would rise to $35.99 with an APR of 547% — corner payday loan territory.


That’s some really expensive summer fun!



Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .