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Charlie, a company based in San Francisco and an app of the same name, began life in 2016. It is a personal finance app that describes itself as helping its users get out of debt without lifestyle sacrifice. The app “worries about money so you don’t have to … sends you simple, timely, actionable updates and advice on Facebook Messenger and SMS.”
The news, though, is that the app now does something new: it deals directly with your credit cards in a way it hadn’t before.
AI and the Gamification of Savings
What has long been the case is that Charlie, connected to a user’s bank account, uses artificial intelligence to analyze spending patterns, devise strategies, and adapt psychological principles to help people turn savings into a habit. Its AI analyzes over $6 billion of user spending data toward these ends.
Before Charlie’s birth, founder Ilian Georgiev worked for Pocket Gems, and there he worked to scale apps that generated millions of dollars in revenue growth. He discovered (as he told TechCrunch) that “a really well-designed mobile game gets people to obsessively manage a virtual economy.”
Georgiev naturally became curious about how to get people in the real world to improve their condition. Can we use the same tools?
Charlie’s partner bank, Evolve, maintains accounts that serve as the “digital wallets” of Charlie’s users. They can auto-transfer money into these digital wallets, arranging the transfers according to rules that are fun, sometimes ridiculous, and certainly game-like. For example, a user can agree to have a dollar sent to his digital wallet every time a contestant on The Bachelor describes herself as “here for the right reasons.”
The user gets positive reinforcement as she meets savings goals, like the site of a penguin dancing under the rain of confetti on a device’s screen: again, this kind of reinforcement is an idea taken from the mobile gaming world, and one with some psychological power.
A 24/7 Friend and Adviser
A chatbot is part of Charlie’s service. It is personified as a talkative penguin that tells you such things as “I found a way you can get the same phone plan for $24 less.”
Some people wake up at 2 a.m. with personal finance issues on their mind. Charlie, at the least, gives that person someone to talk to. On a 24/7 schedule, one can ask the penguin, say, “Is my rent check in danger of bouncing?” or “When is my Sprint bill due?” and receive assistance.
The news about Charlie, in the summer of 2021, is that it has added a new tool to its suite: DirectPay. This means that it will let users link their credit card details to the app. So they can easily transfer savings from their wallet to make their credit card payments. This eases the paying down of debt and fuels Charlie’s AI-driven recommendations.
The notion of providing all this information to a private company and/or its algorithms, however cute the penguin image may be, is bound to set off alarm bells in the minds of some users reasonably concerned about privacy. Charlie uses the same 256-bit SSL encryption that banks use, and it assures those who ask that it relies on the most advanced cryptographic algorithms available. Still, giving or withholding trust is of course the potential user’s call on this most personal of all issues.
This is, of course, not the only mobile app out there offering to help its users save. But it may deserve your consideration. One nice feature: since Charlie is connected with more than 11,000 financial institutions, you can make use of this app even if your bank is one of the “little guys,” a local operation or a credit union.
Use of Charlie, after a one-month free trial, costs $4.99 a month, which of course comes to almost $60 a year.