Break the Cycle: Stop Living Paycheck-to-Paycheck

escaping paycheck to paycheck cycle

What would you do if you had a bill coming up, but you didn’t have the money to pay for it? Say you don’t have a savings, as many Americans don’t these days, where do you turn to – credit, loans, maybe somewhere else? PayActiv is a financial wellness service that helps you avoid debt and escape the dreaded paycheck-to-paycheck cycle.

By now, it’s no news that COVID upended workers and severely damaged the businesses they work for. With waves of unemployment and a wide array of financial struggles, work has become a crucial source of income more than ever. 78% of workers live paycheck-to- paycheck, and 50% of the U.S. workforce struggles to save $400.

An April PayActiv survey of 12,000 hourly workers across 955 companies showed:

  • 46% had their hours reduced
  • 66% said they will be forced into using payday loans
  • 15% will use other forms of credit
  • 19% will have to dip into what little savings they have

The problem with credit cards

At first glance, a credit card might seem like a good safety net to pay for an unexpected expense. But what usually happens is that people get caught up in these nets by monthly fees and experience a lot of trouble getting themselves out.

Sure, credit cards might be a far better option than payday loans, but they’re certainly not free to use. Today’s expense is more expensive tomorrow when you have to pay interest, so before you consider going the credit card route, we recommend trying out this useful credit card payoff calculator to see what your possible repayment plan could look like.

For example, let’s say you owe $1,000 on a credit card that has an interest rate of 25%, and you make monthly payments of $50. In this scenario, you’re looking at 27 months to pay off your debt with $307 in interest. How about that? One-third of your payments are just interest. This is pretty common, and of course, it can get worse. If you owe $3,000 at 29% and pay $100 per month, it would take 55 months and cost $2,406 in interest.

PwC’s 2019 Employee Financial Wellness Survey found:

  • 47% of employees are stressed about their financial situation
    • 67% carry credit card balances
    • 37% cannot make minimum payments on time
    • 23% cannot meet monthly expenses on time

Access what’s already yours

PayActiv is a holistic financial wellness platform that gives you access to wages you have already earned but not yet been paid on.  With our Access Freedom option, if your employer directly deposits your paycheck to the PayActiv Visa Payroll Card, you can access up to 50%, or $1,000 (whichever is less) of earned wages instantly, and for free.  That’s right – for free.

With our Access Choice option, you can transfer up to 50%, or $500 (whichever is less) of earned wages onto any card or bank account for next day availability.  The cost is just $1 per day of use for unlimited transfers on that day. PayActiv only charges one dollar per day to use as many services as you want within a 24-hour period, never more than $5 in fees during a two-week pay period or $3 if you get paid weekly.

If you need money instantly under Access Choice, you can do an instant transfer for just $1.99 extra.

Because PayActiv is not a loan, you avoid unwanted interest and fees, and your stress is replaced with savings down the road. If a small cost can help you save hundreds of dollars, it’s well worth it. You now have the financial wellness tool to build an emergency fund and get yourself out of debt for good.

Our 2019 Impact Report found:

  • PayActiv helped over 1 million users save $240 million in Fin-Tax
  • 38% of users avoided late fees
  • 31% avoided overdraft fees
  • 22% avoided payday loans

Start saving towards financial health

The goal is paying off what you owe and avoiding future debt, so that you can be debt-free. Imagine how nice it’d be to keep those monthly credit card payments all for yourself. That’s what we’d consider a success.

Keep in mind late payments and missed payments can add up. By avoiding them, you can save more for yourself and life’s surprises.

No one could have expected what 2020 was going to be like. Now that we’re nearing its end, it’s time to start thinking about aligning your finances. It doesn’t take any special knowledge to succeed, but it does take effort. Use PayActiv, and you’ll be ready for a better new year.

Holistic Financial Wellness

Learn how PayActiv measurably reduces employee financial stress and employee turnover.

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Access is more than a paycheck.
It's peace of mind.

Access is more than a paycheck. It's peace of mind.

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