April 10, 2018
Hi, I’m Zuben, Co-founder and CEO of Brigit.
I’m a frequent overdrafter, a borrower with a bad credit score and a debit card user who buys lots of coffee and most importantly, want to live life on my own terms.
At Brigit, we provide a simple, transparent, and convenient solution to the ridiculously expensive overdraft and evil payday loan. Our mission is to stop the injustice caused by banks and lenders who charge crazy fees at the time when we need cash the most.
Our team consists of people from diverse backgrounds and political views, but we are united in the goal to reduce financial stress and improve our members’ lives.
Today we are proud to announce that we have made the first step towards correcting this problem and improving financial happiness. Why? Because we all deserve better!
I am so much more than my credit score.
Decades ago, a company called FICO reduced our credit worthiness to a number. Their calculation of the credit score is not just irrelevant but oftentimes completely misleading. Who would use the same score for a $200 advance as for a $2 million mortgage?
This credit score calculation does not really take into account who I truly am. It largely ignores my job, my overdraft repayments, as well as my bill and rent payments. It gets worse — in order to get a credit score, you need to have credit. What if you never wanted credit before?
This nonsensical calculation affects me and over 70 million Americans that don’t have access to good credit. Credit agencies define us as the “underscored” or “thin-file” — a euphemism for they don’t know!
Sadly, this misrepresentation of our “credit worthiness” leaves no good alternatives to using overdrafts, payday loans and sometimes family borrowing. All this because most banks won’t lend to us.
Overdraft: $34 for a cup of coffee … how is this legal?
Occasionally, I need money between paychecks. Not a big deal, my bank can help right? Their response is “Sorry Zuben, you have a low credit score so we can’t give you credit, but you can use our overdraft service anytime, its super convenient.”
What’s the catch?
Overdrafts cost $34 for every transaction when your balance goes below zero. This means that most of us pay almost $70 in fees before we bring our balance back to positive. In finance speak that’s an annual percentage rate (APR) of 5,000%. I myself paid over $600 in overdraft fees last year (thanks Chase) and they did not even text me once to let me know I was running out of money.
But my bank is doing me a favor, right?
Nope! Banks make a boatload of money by hiding fees and sometimes outright lying to you. Their dirty secret is that they made over $34,000,000,000 in overdraft related fees last year. That is $34 BILLION!
And no, the rich don’t pay most of these fees. Most of these fees are paid by people who need money between paychecks — hard working and responsible Americans. If you’re curious at all about the bank fees you pay, find out in our Bank Fee Calculator.
In short, even though overdrafts are super convenient for low credit-scored individuals, they are awfully expensive!
There is a better way and we’re building it at Brigit.
Payday Loans – As Sarah Silverman says… “Do anything else”
Sometimes we just need money to pay bills and nothing else matters. Payday lenders know this and they exist to profit from those moments. In fact, there are more payday lenders than McDonalds or Starbucks.
I’ve spoken to people all over the country and although payday lenders can provide relief, they are fundamentally flawed.
Payday loans are not only horribly expensive, they make most of their profit by exploiting people in vulnerable situations with confusing fees. When borrowers can’t pay back their loans on the due date, lenders force you to “roll over” the loans. This means that borrowers keep paying outrageous fees to buy more time. Generally, consumers pay about $525 in interest for a $375 loan. That’s more interest and fees than the loan itself!
This is what is known as a Debt Trap
It doesn’t stop there, as in the case of Scott Tucker (a notorious payday lender currently in jail), payday lenders have a history of hiding fees, illegally overcharging their members and even destroying documents to hide their tracks.
This needs to STOP. You now have an alternative.
We want you to never overdraft or use payday loans again!
The Brigit app is a wellness app with tools to keep your bank balance above zero. We send you alerts, tips and when needed, we even send you funds (up to $250) to prevent your bank balance going negative. Whether or not you use our funds, you can rest easy knowing you have help paying your bills. Not to mention you can stop losing your hard-earned money to overdraft and late payment fees!
We want to help you if you have bills to pay but you’re running a bit short on money. Also, we want to help you if you are already paying too much in bank fees. We want to help you if you have run out of options from friends and family.
Our service is completely transparent. There are no hidden or late fees. You pay when you can, and the best part is, we don’t use your credit score. We know you are more than your credit score.
We are already saving our customers hundreds of dollars a year in bank penalty fees. This is just the beginning. Together, we can lift ourselves towards financial stability. Join the movement.
Questions or comments? I’d love to hear from you at [email protected].