Digit, the developer of an automatic mobile savings app, has launched a new feature enabling its users to pay down credit card debt directly from their accounts.
“Here’s a secret credit card companies don’t want you to know: a little goes a long way,” the company wrote in a blog post. “For example, if you have $5,000 in credit card debt, an extra $100 a month payment could save you $2,000 in interest and make you debt-free in 30 months compared to 80!”
The new feature allows users to create a “credit card debt” goal in their Digit settings and activate the Digit Pay service. Digit will then automatically begin to save money from a linked checking account and use those funds to pay off credit cards.
The payments can even be prioritized through Digit’s Boost feature, which the company launched earlier this month to allow users to fast-track savings goals.
“We’ve designed Boost to fit the needs of the savings reality most of us face,” the company said at the time. “Some months we have more money and some months we have less. Trying to save more in this uncertain environment can be hard and stressful.”
The Digit app aims to help its users save without the stress. So far, it’s been used to save roughly $1 billion for its customers, according to TechCrunch.
Digit’s software analyzes income and spending and then sets aside small amounts of money so that a customer’s account is never overdrawn and there is enough available to pay the bills. The company offers a 1 percent annualized savings bonus for people who save with Digit for three months. After a free 100-day trial period, the service costs $2.99 per month.
CEO Ethan Bloch says that Digit wants to help its customers solve their biggest financial issues, starting with savings. Since roughly 75 percent of the company’s customers have credit card debt, moving on to this service made perfect sense for Digit.