Should You Take Budget Advice from a Cartoon Bear?

Here’s some advice: Don’t borrow from a bear charging triple-digit interest rates

Our friends at the Dave App just want to help you out.

You know, by offering you a cash advance to cover expenses, like back-to-school needs.

Not only will Dave give you a cash advance, but the app also has some tips for getting the most out of your high-cost cash.

Here are their tips:

1. Compare prices
2. Use coupons
3. Earn cash back with the Dave Debit MasterCard
4. Cancel subscriptions you’re not using

I mean, three of the four of those are just plain good ideas.

Here’s the thing about Dave, though:

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.

So, sure, it’s easy to deal with Dave — as long as you don’t mind paying 100%-500% on the borrowed cash.

Gambling with a Cartoon Bear

So, take the advice and not the loan from Dave. Turns out, cartoon bears pack quite a bite.

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