Charlie, a personal finance app that started out as a chatbot, is relaunched today with a revamped experiment focused on the larger goal of helping everyday Americans get out of debt. To do this, Charlie presents users with a complete picture of their current debt and how long it will take them to pay it off. Users then connect their bank accounts to Charlie for personalized assistance in reducing their bills. It also “gamifies” the economy to make the process of setting aside debt repayments more fun.
According to Charlie CEO Ilian Georgiev, the idea of turning savings into more gambling arose out of his previous experience in the mobile gaming industry. At a company called Pocket Gems, he helped scale up apps that generated millions of dollars in revenue growth for millions of users.
“A really well-designed mobile game makes people obsessively manage a virtual economy,” he explains. “And what interested me was how to get people to do better in the real world economy using the same kind of tools?”
To help on this front, Charlie’s team includes people with backgrounds not only in computer science and engineering, but psychology as well. By using psychological tricks similar to those in the game – rules, progress bars, and reward mechanics – the app helps its users save money.
The original version of the Charlie app, launched in 2016, however, worked a little differently. It would analyze the transaction data to look for areas where the user could improve their finances. It also worked through SMS and Facebook Messenger – the platforms Charlie adopted with the idea that users needed an easier way to connect with their finances.
“But what we’ve heard over and over again, both qualitatively and quantitatively, is that our users ‘biggest concern is,’ How do I get out of debt? So we said, instead of throwing that really wide net… let’s focus on this particular problem, ”Georgiev said.
Today, the chatbot is still a feature of the new Charlie app, but it’s not the main experience.
Instead, users start by providing the app with information about their debt. Georgiev points out that many Americans often know their debt down to a dime – whether it’s how much is left on student loans, how much is left on their car, how much credit card debt they have, etc.
The app then calculates how long it would take to pay off that debt if you only made minimum payments. This number helps people take action, as they will often find that they are going to be in debt for another 40 or 50 years.
“For most users, it’s a revelation because they’ve never seen these numbers before, and the calculations required – even if you do it in Excel – the calculations required to figure this out are beyond most people,” says Georgiev.
The app then encourages users to learn how they can reduce the time it takes to get out of debt by paying more than the minimum. With the click of a button, they can see what happens if you pay, say, $ 20 or $ 50 more per month.
The last step is to help users find that extra cash. Part of this may come from savings that the app locates on behalf of users. But it also comes from the “game” of saving money.
Charlie helps users create automatic registration rules which, when applied, automatically transfer money from the user’s connected bank account to Charlie’s digital wallet (an account held at partner bank, Evolve) . These rules can be fun or even silly. For example, you could create “Guilty Pleasures” rules in which Charlie will set aside 10% every time you eat McDonalds, or it could save you $ 1 each time a contestant on “The Bachelor” says that ‘ he is “here for the right reasons.”
When these rules apply, money is saved and a small progress bar fills up. The app rewards you with rainbow confetti as you achieve success, also similar to some mobile gaming experiences.
At the end of the month, the user can use this saved money to make a larger payment on their debt. Currently Charlie does not handle the bill payment aspects himself – which is a limitation. You need to transfer the funds to your bank. But a bill payment feature is expected to arrive in a few months, we’re told.
Later this year, Charlie plans to offer debt refinancing services to users. In this case, the team thinks they can offer users lower interest rates, because Charlie users will have proven, by using the app, to be less risky.
Further afield, Charlie aims to move further into neobank territory by issuing a debit card to users that works with users’ Charlie accounts. To differentiate himself from the growing number of neobanks, Charlie will continue to focus on paying down debt and savings.
Today, Charlie charges a subscription fee of $ 4.99 per month, which the company aims to offset by helping people reduce their larger debt load faster. However, even that small amount could give money-conscious users a break, despite Charlie’s benefits and successes.
To date, Charlie has logged half a million users for his old chatbot experience. He now hopes to increase that figure with his new tools.
The app is available on iOS and Android.