Mark Cuban was crushed with overdraft fees in his 20s. Now he’s backing an app that’s trying to help people avoid having to pay them.
The billionaire has invested in a new app called Dave that aims to predict upcoming expenses for users to help prevent them from having to overdraft on their bank accounts.
Once Dave connects with a user’s checking account it forecasts their lowest possible balance in seven days based off their spending habits.
When a user’s seven day forecast is negative they are notified. That way they can be proactive and potentially avoid overdrafting and being burdened with bank fees.
“Your available balance doesn’t represent how much a person can spend,” Jason Wilk, Dave CEO told Business Insider.”It may say you have $US1,000, but if your Netflix bill and rent are due in a couple days, then you don’t actually have a $US1,000.”
According to a report by CNN Money, the top big banks – Chase, Wells Fargo, and Bank of America – raked in over $US5 billion in overdraft fees in 2016. In total, overdraft cost customers $US36 billion a year.
Overdraft fees hit close to home for Cuban.
“I got crushed by overdraft fees in my 20s,” Cuban said in a news release, “For anyone who wants to be successful, I always advise to cut down on useless expenses and save money. Overdraft fees are the definition of useless.”
Dave also allows users to borrow cash if their balance gets low. Users who have a negative seven day balance can borrow up to $US250 of their upcoming paycheck to cover expenses.
“We named the company Dave, because we wanted people to think of the app as a friend they can turn to when they’re in a financial bind,” Jason Wilk, Dave CEO told Business Insider.
Dave doesn’t make any money from the borrowing service, aside from optional donations requested by the firm. It does, however, charge a $US1 monthly fee to use the app, which is available to download now on iPhone and Android.
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