MW Can you legally refuse to pay back a cash advance? Yes - but there's a catch.

By Genna Contino

Apps offering quick money are surprisingly fine when borrowers use this loophole.

Earned-wage-access and cash-advance apps operate outside traditional lending rules, allowing consumers to stop repayment without harming their credit.

Anastasia McClain knew she was in financial trouble when her entire paycheck was spoken for before it even hit her bank account.

Each pay period, the money arrived and then vanished almost immediately, siphoned off by a stack of cash-advance apps that automatically withdrew what she owed.

These apps offer cash advances ranging from $25 to $750, typically repaid by pulling the balance directly from a user's bank account on payday. Some apps market themselves as earned-wage-access tools that let workers tap into pay they've already earned, while others offer advances not tied to wages.

For McClain, the first cash-advance app she used two years ago was a way to get quick money to bridge gaps between paychecks. Over the course of a year, they quietly grew into a repayment cycle McClain couldn't escape without taking out another advance.

"There was no way to pay rent without another cash advance," said McClain, who made around $40,000 working at an IT company at the time.

Desperate for a way out of her debt spiral, McClain found a solution on a cash-advance Reddit (RDDT) forum last spring: A post pointed out that borrowers like McClain can revoke the apps' authorization to pull money directly from their bank account and provided directions for how to do this. She contacted each of the cash-advance companies to revoke authorization, and the automatic withdrawals stopped. There were no debt collectors, no credit-score dip - just locked cash-advance accounts she could no longer use.

Letting users revoke ACH access - which stops automatic bank withdrawals - at any time is one of the things that differentiates cash-advance apps from traditional lenders. It is legal for users to do this: the Electronic Fund Transfer Act says consumers may notify a financial institution to stop payments at least three business days before a scheduled debit.

Why users can stop repayment without credit fallout

The companies offering cash advances and access to earned wages know people are revoking ACH access to stop repayment on their loans. They might not promote this fact in their flashy social-media ads, but they frequently cite the right to stop payment in their terms of service and FAQ pages as a core consumer protection that distinguishes them from predatory lenders.

For example, EarnIn provides access to earned wages through its product Cash Out. These earned-wage-access apps are non-recourse - a technical term that means the company cannot use debt collectors or sue for repayment - so Cash Out users aren't held financially liable if they fail to pay back the money.

"Because it is non-recourse, non-repayment does not affect a customer's credit score, and the only impact to the customer is they cannot use Cash Out again until repayment is received," EarnIn's head of communications Stephanie Borman said.

Brigit, an app that advertises access to "instant cash" and "cash advances" rather than earned wages specifically, outlines this in its terms of service: "You may revoke these authorizations by updating your payroll settings in the app or contacting Brigit Support at any time." Brigit did not respond to MarketWatch's request for comment.

Since they aren't technically lenders, these apps don't charge traditional interest. Instead, they charge fees to expedite delivery of the funds. Many apps suggest that users pay optional "tips" after they get their money, which can sometimes be difficult to opt out of.

Read more: Here are the ideas that could really help solve America's affordability crisis in 2026

As many low- and middle-income Americans struggle to afford basic household necessities, experts say more are turning to cash-advance apps to stretch their paychecks. While no comprehensive data exists on app-based cash advances alone, research from the Consumer Financial Protection Bureau shows that about 10 million U.S. workers used some form of paycheck-advance or earned-wage-access product in 2022, the most recent year of available data.

Why people aren't repaying their cash advances

People who stop payment on their cash advances often say they feel they have no other option. A Reddit forum dedicated to cash-advance apps is filled with users who describe revoking apps' access to their bank accounts after stacking multiple advances, falling behind on rent or utilities, or realizing that fees were consuming most of their paycheck before they could cover basic expenses.

In an analysis of anonymized transactions data from cash-advance apps, the Center for Responsible Lending, a research and policy group aimed at improving the state of lending, found that on average, users doubled their borrowing frequency within the first year of using cash-advance apps. It also found that heavy users paid an average of $421 in fees - including overdraft fees to their bank account - during their first year using these apps.

Groups backed by the financial industry have disputed the Center for Responsible Lending's research, with the Chamber of Progress, a tech-advocacy group, arguing the organization is aligned with credit-union interests and that its research against earned wage access is anti-competitive. The Center for Responsible Lending says the industry is "using false allegations as part of a smear campaign to distract from the clear harm caused by their products."

In practice, blocking one of these apps from accessing your bank account doesn't erase the balance - it just stops the app from automatically pulling repayment from your bank account. In many cases, the tradeoff is losing access to the service until the money is repaid.

While the move raises ethical questions - users receive money they may not immediately repay - consumer advocates say it can function as an emergency brake for people who have borrowed more than they can realistically afford.

"If somebody is really stuck in this trap, I would recommend that they revoke authorization," said Lauren Saunders, associate director and director of federal advocacy at the National Consumer Law Center. "It prevents these lenders from getting the first cut before you pay for necessities."

Stopping repayment doesn't necessarily mean a user never plans to repay what they borrowed, said Mike Pierce, the executive director of Protect Borrowers, a nonprofit focused on fighting predatory lending practices.

"All it is is adjusting the method by which you are paying a bill," Pierce said.?"And at that point, if you decide to not pay your bill, that's between you and [the cash-advance app]. But you have a right under federal law to stop payments from coming out of your bank account."

Read more: Americans just spent a record $20 billion with buy-now-pay-later. Here's what to do if you overdid it.

After a user revokes an app's access to their bank account, they have control over their paycheck again. But finance experts say that just stops the bleeding. Seeking nonprofit credit counseling can help users get their finances back on track.

For those who still find themselves needing to stretch their paycheck, Saunders recommends turning to friends and family for help, or a bank or credit union that offers small-dollar loans that are more affordable to pay off.

"Something that you can do once in a while is better than getting yourself stuck into a recurring cycle of just adding more fees to your budget every month," Saunders said.

Two views of cash-advance apps: early pay or payday lending?

Critics equate this financial product to modern payday loans, saying the fees and tips essentially function as interest. The Center for Responsible Lending report found that for loans repaid within one to two weeks, the average annual percentage rate - a measurement derived by annualizing small, short-term fees to estimate what they would equate to over a year - was about 383%. That's nearly as high as the rates on traditional storefront payday loans, which average around 391%.

The fintech industry, however, says that earned-wage-access products are fundamentally different from loans and operate under self-imposed industry standards meant to protect users. Instead, it equates earned-wage-access products to withdrawing money from an ATM: The apps say that their users have already earned the money they are withdrawing, even if payday hasn't arrived yet, and they're paying a small fee to get it instantly. Some earned-wage-access products are offered through employers as a workplace benefit, while others are direct-to-consumer apps tied to recurring deposits.

"Earned-wage access empowers people to access the pay they have already earned rather than taking out a predatory payday loan," said Miranda Margowsky, head of communications at the Financial Technology Association, a trade group that supports earned-wage access and buy-now-pay-later products. "EWA products have no interest, no mandatory fees and no credit-score impact, making them a consumer-friendly and easy-to-use option."

Consumer advocates often group direct-to-consumer earned-wage-access apps like Earnin - which say they let workers access wages they've already earned - with cash-advance apps such as Dave $(DAVE)$, Brigit and MoneyLion, which offer small-dollar advances not strictly tied to earned pay. Both typically collect repayment automatically from a user's bank account on or around payday.

Dave, one of the most widely used cash-advance apps, operates a bit differently. Consumer advocates say the company creates a separate internal deposit account for users and records "ExtraCash" advances as overdrafts on that account, which can make it more difficult for users to stop payment. Dave did not respond to MarketWatch's request for comment.

MW Can you legally refuse to pay back a cash advance? Yes - but there's a catch.

By Genna Contino

Apps offering quick money are surprisingly fine when borrowers use this loophole.

Earned-wage-access and cash-advance apps operate outside traditional lending rules, allowing consumers to stop repayment without harming their credit.

Anastasia McClain knew she was in financial trouble when her entire paycheck was spoken for before it even hit her bank account.

Each pay period, the money arrived and then vanished almost immediately, siphoned off by a stack of cash-advance apps that automatically withdrew what she owed.

These apps offer cash advances ranging from $25 to $750, typically repaid by pulling the balance directly from a user's bank account on payday. Some apps market themselves as earned-wage-access tools that let workers tap into pay they've already earned, while others offer advances not tied to wages.

For McClain, the first cash-advance app she used two years ago was a way to get quick money to bridge gaps between paychecks. Over the course of a year, they quietly grew into a repayment cycle McClain couldn't escape without taking out another advance.

"There was no way to pay rent without another cash advance," said McClain, who made around $40,000 working at an IT company at the time.

Desperate for a way out of her debt spiral, McClain found a solution on a cash-advance Reddit (RDDT) forum last spring: A post pointed out that borrowers like McClain can revoke the apps' authorization to pull money directly from their bank account and provided directions for how to do this. She contacted each of the cash-advance companies to revoke authorization, and the automatic withdrawals stopped. There were no debt collectors, no credit-score dip - just locked cash-advance accounts she could no longer use.

Letting users revoke ACH access - which stops automatic bank withdrawals - at any time is one of the things that differentiates cash-advance apps from traditional lenders. It is legal for users to do this: the Electronic Fund Transfer Act says consumers may notify a financial institution to stop payments at least three business days before a scheduled debit.

Why users can stop repayment without credit fallout

The companies offering cash advances and access to earned wages know people are revoking ACH access to stop repayment on their loans. They might not promote this fact in their flashy social-media ads, but they frequently cite the right to stop payment in their terms of service and FAQ pages as a core consumer protection that distinguishes them from predatory lenders.

For example, EarnIn provides access to earned wages through its product Cash Out. These earned-wage-access apps are non-recourse - a technical term that means the company cannot use debt collectors or sue for repayment - so Cash Out users aren't held financially liable if they fail to pay back the money.

"Because it is non-recourse, non-repayment does not affect a customer's credit score, and the only impact to the customer is they cannot use Cash Out again until repayment is received," EarnIn's head of communications Stephanie Borman said.

Brigit, an app that advertises access to "instant cash" and "cash advances" rather than earned wages specifically, outlines this in its terms of service: "You may revoke these authorizations by updating your payroll settings in the app or contacting Brigit Support at any time." Brigit did not respond to MarketWatch's request for comment.

Since they aren't technically lenders, these apps don't charge traditional interest. Instead, they charge fees to expedite delivery of the funds. Many apps suggest that users pay optional "tips" after they get their money, which can sometimes be difficult to opt out of.

Read more: Here are the ideas that could really help solve America's affordability crisis in 2026

As many low- and middle-income Americans struggle to afford basic household necessities, experts say more are turning to cash-advance apps to stretch their paychecks. While no comprehensive data exists on app-based cash advances alone, research from the Consumer Financial Protection Bureau shows that about 10 million U.S. workers used some form of paycheck-advance or earned-wage-access product in 2022, the most recent year of available data.

Why people aren't repaying their cash advances

People who stop payment on their cash advances often say they feel they have no other option. A Reddit forum dedicated to cash-advance apps is filled with users who describe revoking apps' access to their bank accounts after stacking multiple advances, falling behind on rent or utilities, or realizing that fees were consuming most of their paycheck before they could cover basic expenses.

In an analysis of anonymized transactions data from cash-advance apps, the Center for Responsible Lending, a research and policy group aimed at improving the state of lending, found that on average, users doubled their borrowing frequency within the first year of using cash-advance apps. It also found that heavy users paid an average of $421 in fees - including overdraft fees to their bank account - during their first year using these apps.

Groups backed by the financial industry have disputed the Center for Responsible Lending's research, with the Chamber of Progress, a tech-advocacy group, arguing the organization is aligned with credit-union interests and that its research against earned wage access is anti-competitive. The Center for Responsible Lending says the industry is "using false allegations as part of a smear campaign to distract from the clear harm caused by their products."

In practice, blocking one of these apps from accessing your bank account doesn't erase the balance - it just stops the app from automatically pulling repayment from your bank account. In many cases, the tradeoff is losing access to the service until the money is repaid.

While the move raises ethical questions - users receive money they may not immediately repay - consumer advocates say it can function as an emergency brake for people who have borrowed more than they can realistically afford.

"If somebody is really stuck in this trap, I would recommend that they revoke authorization," said Lauren Saunders, associate director and director of federal advocacy at the National Consumer Law Center. "It prevents these lenders from getting the first cut before you pay for necessities."

Stopping repayment doesn't necessarily mean a user never plans to repay what they borrowed, said Mike Pierce, the executive director of Protect Borrowers, a nonprofit focused on fighting predatory lending practices.

"All it is is adjusting the method by which you are paying a bill," Pierce said.?"And at that point, if you decide to not pay your bill, that's between you and [the cash-advance app]. But you have a right under federal law to stop payments from coming out of your bank account."

Read more: Americans just spent a record $20 billion with buy-now-pay-later. Here's what to do if you overdid it.

After a user revokes an app's access to their bank account, they have control over their paycheck again. But finance experts say that just stops the bleeding. Seeking nonprofit credit counseling can help users get their finances back on track.

For those who still find themselves needing to stretch their paycheck, Saunders recommends turning to friends and family for help, or a bank or credit union that offers small-dollar loans that are more affordable to pay off.

"Something that you can do once in a while is better than getting yourself stuck into a recurring cycle of just adding more fees to your budget every month," Saunders said.

Two views of cash-advance apps: early pay or payday lending?

Critics equate this financial product to modern payday loans, saying the fees and tips essentially function as interest. The Center for Responsible Lending report found that for loans repaid within one to two weeks, the average annual percentage rate - a measurement derived by annualizing small, short-term fees to estimate what they would equate to over a year - was about 383%. That's nearly as high as the rates on traditional storefront payday loans, which average around 391%.

The fintech industry, however, says that earned-wage-access products are fundamentally different from loans and operate under self-imposed industry standards meant to protect users. Instead, it equates earned-wage-access products to withdrawing money from an ATM: The apps say that their users have already earned the money they are withdrawing, even if payday hasn't arrived yet, and they're paying a small fee to get it instantly. Some earned-wage-access products are offered through employers as a workplace benefit, while others are direct-to-consumer apps tied to recurring deposits.

"Earned-wage access empowers people to access the pay they have already earned rather than taking out a predatory payday loan," said Miranda Margowsky, head of communications at the Financial Technology Association, a trade group that supports earned-wage access and buy-now-pay-later products. "EWA products have no interest, no mandatory fees and no credit-score impact, making them a consumer-friendly and easy-to-use option."

Consumer advocates often group direct-to-consumer earned-wage-access apps like Earnin - which say they let workers access wages they've already earned - with cash-advance apps such as Dave (DAVE), Brigit and MoneyLion, which offer small-dollar advances not strictly tied to earned pay. Both typically collect repayment automatically from a user's bank account on or around payday.

Dave, one of the most widely used cash-advance apps, operates a bit differently. Consumer advocates say the company creates a separate internal deposit account for users and records "ExtraCash" advances as overdrafts on that account, which can make it more difficult for users to stop payment. Dave did not respond to MarketWatch's request for comment.

(MORE TO FOLLOW) Dow Jones Newswires

February 13, 2026 14:32 ET (19:32 GMT)

MW Can you legally refuse to pay back a cash -2-

The American Fintech Council, a trade group representing financial technology companies, provides standards that its earned-wage-access members must follow. These include providing a free option and the ability to cancel at any time as well as not charging interest or late fees.

However, these are self-imposed industry regulations and aren't legally binding. Bipartisan legislation drafted last month aims to establish basic consumer protections and a federal regulatory framework, but for now, a lot remains up in the air for companies, regulators and consumers.

McClain, who is coming up for air after stopping her cash-advance app repayments, now works in a different role at the same company, making about $14,000 more than she did before. She's currently working on getting her finances back on track - and she doesn't plan to completely abandon what she owes.

"Once I have the other, credit-score-impacting debt under control, I do plan on trying to pay the cash advances back," McClain said. "But they are certainly my lowest repayment priority."

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Read next: Americans are starting the new year with record debt. Here's how they can get it under control.

-Genna Contino

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February 13, 2026 14:32 ET (19:32 GMT)

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