How Fast Can You Fall Into a Debt Trap?

Dave promises to make it happen in 5 minutes or less

Andy Spears
2 min readMay 10, 2024
Email asking Dave users to go into debt

If you like going into debt and then digging a deeper and deeper hole, the Dave App might be just right for you.

The image above is from one of Dave’s many email campaigns asking potential customers to take just a few short minutes and download a mountain of problems.

Dave has a simple business model: Help you go into debt on your phone and then profit handsomely when you become a repeat customer.

The L.A. Times broke down Dave’s evolution into payday lender territory:

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.

Back in March, Dave tried to entice borrowers by offering them even more (20% more) debt:



Andy Spears

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