Credit card companies love to lure consumers in with promotional gifts, offers and rewards.
But we all know the associated risks of mounting debt that come along with that shiny plastic, and we all probably have that family friend or relative who took their credit card spending a little too far in the name of reward points.
Wouldn’t it be great if we could enjoy all those credit card perks without the threat of exorbitant interest charges on a balance we can’t afford to pay?
That’s where SteadiPay comes into the picture.
Should You Sign Up for SteadiPay? Team Clark’s Review
In what some readers might see as a replacement of the defunct Debitize app, SteadiPay is a free app that offers the chance to use credit cards for their rewards with the confidence that you’ll have the money on hand to pay the balance off each month.
As their website says: “Credit card perks. None of the stress.”
Of course, that comes with a couple of important security caveats that involve a third party both having access to your accounts and holding your money in an FDIC-insured account.
We’ll review the SteadiPay app in this article, explaining the process and hopefully ultimately helping you decide if you should give it a try.
1. What is SteadiPay and How Does It Work?
Simply put, SteadiPay is a free app that helps consumers take advantage of credit card perks without overspending.
Users are able to purchase items with a credit card to accumulate points or cash back opportunities but with SteadiPay in place, that triggers an immediate counter-transaction with their bank account.
Thus, users are receiving the credit card benefits of a purchase while seeing a debit card-like consequence on their bottom line.
For example, if you made a $30 purchase with your credit card at a local restaurant for dinner and then stopped at the ice cream parlor for an $8 dessert, SteadiPay would take $38 out of your bank account at the end of the day.
This money would be set aside for a future payment on the credit card balance.
As a result, you’re going to feel the immediate financial “pain” of the credit purchase. This assures that you’re going to have the money set aside to pay for the credit card bill.
It also should, in theory, reduce the temptation to spend recklessly with a credit card that could run up costly interest charges if you’re unable to settle the balance at the end of the billing period due to the potential of insufficient funds.
It is worth noting that SteadiPay says you get to set the date of these automated payments. You also can reclaim your money at any time prior to that scheduled payment if you should need it to pay for something else.
SteadiPay lays out the process pretty succinctly in this one-minute explanatory video:
2. Major Benefits of Using SteadiPay
Enjoying the Security Benefits of Credit Cards vs. Debit Cards
Money expert Clark Howard has long been a proponent of using a credit card instead of a debit card due to the higher level of protections they typically offer for things like fraudulent charges.
SteadiPay gives you the chance to use credit cards for maximum purchase security without the concern of your finances spiraling out of control in the process.
Avoiding Overspending With Credit Cards
Let’s face it, there are pitfalls to credit card spending. It is easy for an undisciplined consumer to spend more than they should with their credit card because the money is not owed on the spot. It’s a financial version of kicking the can down the road, if you will.
While many Clark.com readers are likely able to pay off their credit cards each month by being financially disciplined (read: spending well less on credit than they earn each month), SteadiPay gives a lifeline to the weak among us.
You’ll feel that credit purchase pain each night when SteadiPay zaps that money out of your account.
Managing Spending on Multiple Credit Cards at Once
Using multiple credit cards to gain multiple benefits is a great idea. Securing airline miles from one, hotel points from another and cash back bonuses from a third can add up to a lot of useful perks, for example.
But managing the payments for each and making sure you stay on a financial schedule can sometimes feel like a part-time job.
SteadiPay offers the ability to use multiple credit cards on one account, taking out money for each of them daily. You’ll also have the ability to pay each of them off via the app each month.
It is worth noting that SteadiPay now supports small business credit cards, which could help entrepreneurs out there juggling finances.
3. What Are the Security Risks Involved With SteadiPay?
Whenever an app or online service is requesting access to your bank account, credit account and other personal information, it’s only natural to be extremely skeptical. SteadiPay recognizes this and takes some steps to ease concerns.
The first thing SteadiPay will ask for upon signup is for credentials to log in to your credit card account, which seems like a huge red flag. But SteadiPay promises that it’s only a temporary thing as a part of the setup process.
Here’s a look at some of the screens you’ll encounter when signing up on your phone:
The SteadiPay website touts “bank-level” encryption to ensure safety, and uses online data specialists Plaid to connect your sensitive account information to the app.
Balances and transaction information are tokenized, which means they “substitute a randomly generated identifier for sensitive data in order to prevent unauthorized access.”
A quick look at the app’s privacy policy indicates that SteadiPay collects the following information upon acceptance of their user agreement:
- Name
- Address
- Email address
- Password
- Mobile telephone number
- Date of birth
- Social Security Number or government issued identification details
- Your full credit card number(s)
- Facebook login credentials
- Your login credentials, including your usernames and passwords, for the online credit and
checking accounts that you would like to use as part of the App (your “Credit Card Account” and
“Bank Account,” respectively). Your login credentials for your Bank Account are used to collect
the account and routing number for your Bank Account and that information is shared with our
third-party providers.
4. Where Does SteadiPay Hold Your Money and Can You Get It Back?
SteadiPay is monitoring your credit card purchases and subsequently removing the money needed to pay them off from your bank account. This money is being transferred via ACH transaction into a FDIC-insured account, owned and managed by SteadiPay.
As SteaiPlay explains it, there is a bit of a lag between the time your purchases are made and when the money will show in your SteadiPay account.
Typically that delay is 2-3 business days from the purchase date. A purchase on Wednesday would transfer on Thursday and likely post by Friday, for example.
SteadiPay also offers the ability to pull your money back into your bank account without penalty. This process can take up to three business days.
It is worth noting that if your bank account does not have sufficient funds to cover the amount you’ve spent on your credit card in a given day, SteadiPay says it does not attempt to take that money, nor does it have the power to stop your credit card transactions.
Instead, it will send you an alert to make you aware of the situation.
5. Does SteadiPay Help Increase Your Credit Score?
The act of using the app does not guarantee an increased credit score, but it certainly can help. That’s provided you take the proper steps alongside it, of course.
As Clark readers likely already know, your credit score is a complex number that is impacted by many different pieces of your financial pie.
Regularly using credit, maintaining an acceptable utilization rate with said creditors, and making payments on time are all parts of building a strong credit score.
SteadiPay can help improve your rating in those areas. You’ll see an increase in utilization of your credit lines by making the decision to use credit cards over debit cards for all of your purchases. From there, the app should be able to help you keep your credit utilization in check by paying off those balances. And if they’re scheduled properly, the payments should be on time each month.
If you’re able to consistently do that for several months consecutively, the credit bureaus are likely to take notice.
Keep in mind that you also can accomplish this on your own without the use of SteadiPay. It’s simply a tool to help you get there.
6. Reviews of SteadiPay
SteadiPay does not yet have a profile on the Better Business Bureau website as of October 2019.
Instead of checking with the BBB, we decided to analyze the online user ratings for the product. The results are mixed, though there are a limited number of evaluations.
Complaints seemed to be based on the timeliness of getting money back out of SteadiPay and some minor user concerns about the app.
- Apple App Store: 5.0 out of 5 (5 reviews)
- Google Play Store: 3.2 out of 5 (21 reviews)
Final Thoughts on SteadiPay
The idea behind SteadiPay is a good one, and it’s something that has been done before via Debitize. It will make sense for quite a few consumers who are looking to simplify the game of purchasing with credit and paying it off each month.
However, I always like to caution people about giving out too much sensitive personal information on the internet. This app needs a whole bunch of it to work properly.
SteadiPay says all the right things when it comes to security, but they wouldn’t be the first and won’t be the last major online entity to be subjected to the dangers of a potential data breach.
Couple that security risk with the delay in getting your money back from SteadiPay if you absolutely need it, and I personally will pass on using the service.
In my experience, manually paying off credit card balances each month is a great way to force yourself to put eyeballs on what you spent and where you spent it.
