Noom for Debt
In Stage 2, we are fleshing-out potential solutions, researching competitors, building clickable mock-ups, interviewing potential customers, and testing audiences.
Large numbers of people have considerable credit card debt that they feel unable to get out from under.
The financial industry provides debt consolidation and credit counseling but these are not good solutions for many people.
Debt consolidation - whereby the borrower consolidates all of their credit card debt into a single loan, with a lower API - seems smart in principle but, in reality, borrowers do not consider the monthly cashflow required to make the payments on the new loan, and end up running-up balances on their credit cards again. In other words, consumers have been told that the way to get out of debt is to get more credit, which is clearly not a good solution.
Credit counseling is presented as a mechanism for borrowers to lower their APR but is often provided by the credit card companies themselves to keep borrowers paying interest rather than consolidating into loans or filing for bankruptcy.
There is a lot of shame, anxiety, stress, and depression caused by indebtedness. Providing financial management tools to help borrowers manage track expenses, build and manage a budget, etc might help some proportion of borrowers get on top of the problem. However, many people just stick their head in the sand and hope the problem will go away. People know they should create a budget and stick to it but don't.
This is no different to tackling weight loss - just having a bathroom scale doesn't solve the problem for most people. You have to have the courage to step on the scale every day and the tools to change your eating habits.
What is needed is a solution that gives borrowers the courage to tackle the problem, build healthier habits around financial management, and helps drive long-term behavioral change.
Followers: • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Early in the pandemic, there were encouraging and surprising signs about the decline of credit card debt. In fact, 42% of those with credit card debt, or 59 million Americans, say they have added to their balances since the beginning of the pandemic, according to a new study by personal finance site Bankrate.com. "Things are better for some, but they are not better for everybody," explains Ted Rossman, Bankrate’s senior industry analyst.
More Americans are using credit card debt to cover everyday expenses, like rent. These studies explore the links between debt and stress.
Student loan borrowers have been hoping for news of forgiveness. Instead, they're getting reminders from their servicers that the bills will soon resume.
The new way of delivering Financial Education to young adults. Credit unions and banks partner with Zogo to engage, educate and earn the trust of young adults.
A recent report quantifies how major factors are linked to the racial homeownership gap.
Wells Fargo CEO Charles Scharf has been forced to make hard decisions during the pandemic, offloading assets and deposits and stepping back from some products.
This post is the first in a series of SciFi Theses. In this series, we will share ideas for companies that we at SciFi think should be built.