Budgeting app Charlie pivots to help users reduce debt

The makers of personal finance app Charlie have revamped the tool to focus squarely on getting consumers out of debt and soon hope to add bank-like products, such as loan refinancing and a debit card.

The app, which first launched in 2016, started as a chatbot that analyzed users’ transactions and provided budgeting recommendations. Those features remain, but the San Francisco company unveiled several new components for its 500,000 users on Jan. 27.

“We were trying to address every line item on a user’s budget,” Ilian Georgiev, Charlie’s CEO and co-founder, said in an interview. “Whereas now, from talking to users, we saw one of the biggest problems is figuring how to get out of debt so we are focusing the entire experience around that.”

“Our users…need a voice telling them they can do this and it’s achievable,” said Ilian Georgiev, CEO and co-founder of Charlie.

For example, users will be asked to manually enter the details of their debts, such as credit card balances and personal loans. The Charlie calculator will show the impact that saving a reasonable sum of money each month would have on reducing the number of years and the amount of interest the user spends repaying the debt.

To help the user find this spare cash, Charlie provides a long list of auto-transfer rules, some of which are quirky — users can instruct Charlie to save, say, $20 every time a contestant on the ABC reality show “The Bachelor” utters a token cliche, or one million people get the COVID-19 vaccine — while others are tied to perceived guilty pleasures, such as setting aside a certain amount every time the user buys fast food.

Once a week, Charlie moves the designated amounts into a digital wallet hosted by software company Sila, then sends the money back to the user’s checking account when it’s time to pay down debt. Eventually, the makers of Charlie intend to transfer that money directly to the debt-holder’s accounts.

Another key component of the app is positive reinforcement, in the form of motivational language, on-screen confetti to celebrate and a motivational penguin achievement.

“Our users are harsh on themselves and don’t need another voice telling them they’re doing things wrong,” said Georgiev. “They need a voice telling them they can do this and it’s achievable. This permeates the brand, from the colors and visuals down to the copy we use in the product. It’s lighthearted, joking, and tongue-in-cheek.”

Georgiev and his team chose the penguin as a mascot because penguins are non-intimidating, fun and take small steps when they walk, just as Charlie users need to take small steps to reach their budgeting and debt-redction goals. As for the name, the team felt “Charlie” evoked a persona that was approachable, trustworthy and gender-neutral.

For now, the company makes money by charging a monthly fee of $4.99, with the first month is being free. In the next three to six months, it plans to launch refinancing products, and later, issue a Charlie debit card.

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