Credit card usage has grown exponentially since first introduced in the 70s. While it has enabled our consumption-driven economy to grow to new economic heights, our reliance on credit has left us stranded with poor financial habits. More Americans are in debt now more than ever, without a way to climb out of their financial hole. Debt is so pervasive in our society that pizza companies are offering a buy-now-pay-later option for ordering via their online checkout. Frida Leibowitz, Rachel Lauren and Maxime Fourmault are helping Americans reduce their reliance on credit with Debbie before they financially overdose. Debbie is a “habit-shifting rewards platform” that leverages behavior psychology to craft financial products that give users a path out of debt and towards a healthier financial future. The Miami, Florida-based startup has raised $1.2m from One Way Ventures, BDMI, TA Ventures, Village Global, Green Egg Ventures, Liquid2 Ventures, If Then Ventures, Dipanjan Bhattacharjee and several other angel investors.
Adam Moelis, co-founder of Yotta and angel investor in Debbie, says, “A lot of FinTech apps now offer financial wellness tools, but they often focus on short-lived relief rather than on building long-lasting financial habits. Debbie uses behavioral psychology concepts to create a personalized, engaging and accessible journey to debt freedom for those struggling with perpetual cycle of debts, significantly increasing their chances of achieving long-term success.”
Dipanjan Bhattacharjee, COO of Nirvana and angel investor in Debbie, states, “I have known Frida over the years and seen how smart and passionate she can be to get things done. I was very impressed with the vision of Debbie and the way Frida and Rachel wanted to challenge the status quo of debt consolidation loan offerings out there. The rare combination of relevant experience, right skillset and can do attitude is what convinced me to invest and help in any way I could.”
America’s reliance on debt has only grown worse over time. As consumers who are constantly marketed to throughout the day, the temptation to spend only grows proportionately. Credit cards are incredibly useful in bridging the gap when one has cash flow issues or wants to rack up reward points, but they are a double-edged sword once the bill comes due. Many Americans carry a balance every month, which leaves them in a worse position because of credit cards’ exorbitant interest rates. (There’s also the common financial misunderstanding that it’s better to carry a balance to improve your credit score, which is not true. You should aim to pay off your balance every month!) Having healthy credit card use is crucial to having a high credit score, which can impact your ability to access loans for a car or house and even whether a prospective employer will hire you or not. With American credit card usage ballooning for the worse, there is a lucrative market to help Americans get out of debt.
Consumer credit card debt clocked in at $841B in the first quarter of 2022. With such massive debt, it’s unlikely that every user can pay off their balance promptly. Payday loan companies take advantage of individuals and families in dire financial straits, lending them money at interest rates that would cause credit card companies to blush, being over 600% in some cases. The stigma of carrying debt can affect someone so deeply psychologically that they start failing to be functioning members of society. Leibowitz, Lauren and Fourmault can intervene with Debbie before it’s too late for debt-saddled individuals and families.
Debbie offers its users a rewards platform for debt payoff, putting them on track to be net worth and cash flow positive. The startup encourages positive and constructive behavior with financial incentives for users to build good financial habits. The founders believe that the technical implementation of their solution is easy; but the true difficulty is understanding its users’ relationship to and habits with money and incorporating those lessons into the core of Debbie’s platform. Debbie relies on Cognitive Behavioral Therapy and behavioral psychology to help users glean insights into the drivers behind their spending habits. By bringing these spending habit insights to the forefront of a user’s attention via the app, the startup is able to design real-time rewards actions to gradually shift the spender’s behavior.
The startup’s current offering sets it on a path to offer future products and services that incentive paying off debt and saving simultaneously, and more importantly, help users build long-term wealth through homeownership, investing, and retirement. Specifically around credit, the data that Debbie collects can provide a more dynamic, real-time perspective of credit card user, which can be useful to lenders in deciding who they approve for loans in the form of mortgage or other lending products. Leibowitz herself has been in major debt before, both individually and her family. As much as she is building a product for others as her customers, she’s building a tool she and her family wish they had as they navigated their way through America financially. Fortunately, her partnership with her cofounders make Debbie’s massive potential impact more of a reality as each day comes and goes.
CEO Leibowitz states, “I grew up in a single-parent, immigrant, non-college educated family that had no access to financial education and always struggled with debt. As an adult, I fell into the same debt trap and racked up $15k in credit card debt by the age of 21. Hoping to make a difference for others, I spent my early career days in digital consumer lending and had the unique opportunity to simultaneously sit in the borrower’s and the lender’s seats. I was increasingly frustrated that our current financial system is quick to knock us down when we misbehave but does not do a good enough job of celebrating our wins.”
Leibowitz leads the founding trio as CEO. She graduated from NYU’s Stern School of Business with a degree in Business and Political Economy and was previously a core team member on Goldman Sachs Credit Risk and Product, working on the firm’s growing consumer credit card product, Marcus. Lauren, Debbie’s COO, obtained her degree in Business and Political Economy from NYU’s Stern School of Business and formerly worked as a venture capitalist at BDMI and performed equity research at Credit Suisse. Rounding out the team is the Ecole Privée des Sciences Informatiques (EPSI)-educated Fourmault. Having majored in Computer Science, he previously worked at Earnest as an engineer manager and has prior entrepreneurial experience. These three combine their deep financial experience and temper it with a healthy respect for mental health as entrepreneurs. Together, they will get Americans and their families out of debt and create wealth for generations to come.