App can advance you up to $500 of your paycheck -- for free

Posted at 4:30 AM, Jul 11, 2017
and last updated 2017-07-11 10:27:42-04

CINCINNATI -- Although it's been eight years since the Great Recession began, nearly half of all Americans still live paycheck to paycheck, according to a survey conducted by Go Banking Rates.

Abby Turner, a single mother of two, is one of them. Turner said she works up to 12 hours at UC Health each weekday and considers herself lucky if she manages five hours of sleep.

"Four years ago, I went through a divorce; the year before that I had gone through a bankruptcy with my ex-husband, so that put things on a standstill," she said.

She did not qualify for any government assistance, and the bankruptcy disrupted her ability to access any kind of credit, she said. Beyond the emotional distress -- like any mother, she said she wanted to be able to provide everything for her children -- she also faced a debilitating financial crunch when she needed to pay for repairs to her car.

"That's a couple of hundred dollars that, when you're living paycheck to paycheck, you don't have," she said.

That's why she loves the app Active Hours, which can advance workers up to $500 per pay period with a limit of $100 in a day.

Active Hours works like this: Workers can photograph their timesheet to show the hours they've worked, then "cash out" to receive that part of their paycheck in advance. The amount they advanced is then subtracted from their account the next time they are paid.

It's been a boon to Turner, but Xavier University finance professor David Hyland said anyone downloading Active Hours should use it cautiously. Although it's free now, which makes it a helpful alternative to traditional payday loans, it may add fees in the future.

And, as with all online activities involving money, it could represent a goldmine for hackers who hope to steal financial information.

"If somebody is hacking and trying to steal data, (financial apps) are the prime targets," he said.

Hyland recommended families only use it when necessary.