February 24, 2021
In recent years, consumers have been moving away from institutional banking and towards simple, easy, and affordable personal finance solutions. The rise of Canadian success-story, Wealthsimple, suggests this model is here to stay.
In line with this trend is the relaunch of personal finance app, Charlie. As TechCrunch reports, the app has relaunched with a focus on helping Americans get out of debt while developing better financial habits.
The app offers users a snapshot of their current debt load and how long it would take to pay it off making minimum payments. CEO Ilian Georgiev notes that this is often the first time users are seeing this type of modelling. Though likely jarring to users at first, this is precisely the reaction that makes the app potentially useful. The shock that comes when a user realizes they could be in debt for 50 years, is enough to spur them to action. The app allows users to visualize how long it would take them to get out of debt if they allocated more than the minimum payments towards their debt.
The app also helps users identify areas where they could be saving. Users can create fun rules, which when triggered, transfer money from a user’s bank account to their “Charlie digital wallet”. This amounts to a modern, digital version of a “swear jar”. Users can get creative, instructing the app to transfer a certain amount every time a contestant on the Bachelor says they are “here for the right reasons” or every time they make an impulse Amazon purchase. The app features a progress bar, that illustrates how close the user is to achieving their financial goal, and once achieved rewards them with confetti.
Unlike budgeting apps like Mint and You Need a Budget, Charlie is aimed specifically at helping users pay down debt. Originally launched in 2016, the app was meant to analyze transaction data to determine areas where users could improve their finances. The re-launch focused on debt solutions was largely driven by user feedback. Charlie even plans to offer debt refinancing solutions at some point, as the company believes they can offer lower interest rates to app users that have demonstrated they are low risk borrowers through good saving habits.
Author: Emma Baumann