★ Rockstar Review: Debitize (Use Credit Cards Like Debit Cards!)

Posted December 20, 2016 6:00 am by with 8 comments

Review of: Debitize
Price:
FREE

Reviewed by:
Rating:
4
On December 20, 2016
Last modified:December 24, 2016

Summary:

A clever way to turn your credit cards into debit cards! (And help you stay out of debt)

Debitize app

This is part of our Rockstar Reviews series.
Be sure to check out all previous products we’ve reviewed!

debitize logo

rockstar rating 4-stars

Who it’s for: Those who want help managing their credit card payments/staying out of debt.

Ease of use: Set up a link between Debitize and your credit cards/bank accounts – that’s it!

What I liked about it: It is completely automated and very flexible.

What I didn’t like about it: Requires providing Debitize access to credit card and bank account information.

Debitize.com (Free!)

A Clever Way to Turn Your Credit Cards Into Debit Cards

I like to think of Debitize as the antithesis of temptation. The inverse of entrapment. The counter to bait. Okay, what exactly am I getting at here?

Debitize helps keep you out of credit card debt by creating a link between your credit cards and your bank account. It also pays your credit card bills for you. Simply use your cards as normal and let the Debitize system take care of the rest.

It’s a clever system that essentially turns your credit cards into debit cards, but without losing your credit card points. The temptation to run up mountains of credit debt instantly becomes tough.

Let’s take a look at how it works in detail below.

How Debitize Works

Debitize is easy to setup:

  • First, sign up for an account with your email, name and a password.
  • Connect your regular bank account, as well as each credit card that you use, to your Debitize profile online.
  • Lastly, proceed to use your credit cards as you normally would.

That’s it. You’re done. Once your financial accounts are connected to your profile, proceed to do business like you normally would. Remember that Debitize does NOT issue you a credit card. You keep using your own cards on your own purchases. I like that it’s unobtrusive.

Every time you make a purchase with your credit card, Debitize will automatically transfer that amount of money from your bank account to your Debitize account.

Then, Debitize will proceed to pay your credit card bills for you by using the money that was transferred in throughout the month. Of course, you can adjust how much of your credit card bill will be paid off as well as the amount that Debitize transfers in. Though we all know paying off 100% of it is best!

But, stuff happens. Plans change. Money becomes tight.

What happens if you need access to money that has been transferred into your Debitize account? You can always transfer it straight back. Use this sparingly! Remember, the point is to keep out of credit card debt by retraining your mind to think differently about each purchase.

Retrain Your Mind

Rather than using your credit card to spend more money than you probably should, Debitize helps you to instantly (and automatically) “pay for” every expense charged to your credit card. Your bank account will shrink as you continue to spend, providing constant visibility into your financial situation.

This critical feedback helps you make better decisions about your money. It keeps you honest and makes the question “Do I have enough money to make this purchase?” much more obvious, and the peace of mind in knowing your finances is simply amazing.

Once we truly begin to understand our financial standing, money choices become easier to make!

It works. Check out this message our friend Jenny sent us when we went looking for people who have used Debitize before:

I’ve been on the path of budgeting and paying down my CC balances for about a year now, and started using Debitize at the start of the summer.  IT IS LIFE CHANGING.  I struggle with budgeting a little bit, bc I am the type that looks at my checking account and thinks that’s how much money I have to spend (I know its not the best mindset, it’s just how I am wired)! Enter cash/debit only diet, which was great, but I am neurotic about protecting my identity and missed out on that from a credit card. Then came debitize! Now I am much better about staying in my lanes, I check daily to make sure my debitize account is fully funded, and I NEVER worry about paying my balance, they take care of it for me! I’m happy to report I will be CC debt free on New Year’s Eve, and I give debitize a lot of credit for that :)

Congrats, Jenny! Though don’t forget it was YOU who ultimately took control ;)

Interview with Founder, Liran Amrany

liran amrany

I had the opportunity to ask one of the founders of Debitize some pointed, “hard hitting” questions about this service. Check it out!

1. I LOVE the idea. What spurred this on? Did something happen, or did a [mental] lightbulb go off that started this project?

The idea first came to me when I had two friends in the span of a week tell me they were switching from credit to debit. That made no sense to me at the time, because I’ve always used credit cards myself and I come from finance where all my colleagues would wait until the last date to pay their credit card bills.

After talking with these two friends of mine, I better understood how debit cards help people stay on top of their spending, and then did some more research to realize how large of a trend the move from credit to debit has been, especially among millennials.

I’m sure you’ve seen the numbers by now. According to some sources, close to 2/3 of millennials avoid credit cards. And it’s likely to cost them long-term if they don’t have a good credit score – not to mention the hundreds of dollars a year in cash back or points you’re missing out on. The solution seemed somewhat obvious: why not pay off your credit card purchases every day?

2. Do you personally use this service? How about your family? Friends?

Of course I do. Several of my family and friends do as well. Of the first 30 users, 25 of them were people that were pretty close to me or my co-founder. The others were people I had met through the startup community that were excited about what we were building and wanted to use it themselves, even at that early stage.

3. What do you say to people who may have trouble forking over their bank account information (privacy/security)?

Well I don’t blame them – it’s clearly sensitive information – but we are very careful with your info. We pass it directly to our data partner, Plaid. This is their business, and they are extremely dedicated to security. It’s also the same company that Betterment, Acorns, Venmo, and others use – so if you use any of those apps, Plaid already has your details. We don’t store any of that ourselves on our server, and we also don’t allow any functionality for anyone to move money from any of your accounts to someone else’s.

That being said, we don’t want anyone to do anything that makes them uncomfortable. I’d likely never convince my mother to do this for that exact reason, which is totally fine.

4. For those of us who already have a strong handle on staying out of credit card debt, can your service still help?

Absolutely – I’ve personally never had an issue with credit card debt, but still missed a couple payments in the past – which means it either costs me $35 or I have to waste 20 minutes calling and asking to waive the fee for me. No more late fees with Debitize! Plus even if you’re not worried about credit card debt, many of our users just find it easier to keep track of their spending when the funds come out daily instead of at the end of the month. It makes you more aware of how much you are spending and gives you peace of mind.

Also, our new Credit Optimizer feature helps you build credit even faster by making an extra payment (in addition to paying off your bill) to pay your balance down to 1% of your credit limit right before your issuer reports your utilization (30% of your FICO score) to the credit bureaus. Go ahead and check the impact for you on Credit Karma’s Score Simulator – for many people, it’s easily a 30+ point boost in their credit score.

5. How many customers (a range is okay) use this service?

We’re in the multiple thousands (and growing!).

6. Can this service help me to pay off my mortgage faster? Pretty please?!?

Not yet, but that’s certainly where we’re eventually taking this! Mortgage, student loans, personal loans – we’ll help you pay them down quickly and optimally. And we’re also going to help you cover other expenses like rent, tuition, utilities, insurance payments, and more.

Interested in checking out Debitize?
Sign up here (it’s free)!

(Rockstar readers get a $10 credit towards their next credit card bill!)

All Rockstar Reviews include affiliate links to the companies being featured. Thank you to all those who support our site by going through them when you find them helpful!

Steve is the founder of ThinkSaveRetire.com – a site where he shares ideas and techniques on how to retire from your 9-5 job and start to enjoy the virtues that life has to offer outside of full-time work. Life is about more than fluorescent lights and gray cubicles!

8 responses to ★ Rockstar Review: Debitize (Use Credit Cards Like Debit Cards!)

  1. FIREin' London December 20th, 2016 at 6:47 am

    Hi,

    Interesting to see this being offered, but I am surprised this is not already more widespread?! I’ve been taking this approach for some years (albeit a purely manual process), its great as it is easy to see how much money you have left towards the end of the month (and avoid a nasty surprise large credit card bill), you earn interest in the savings account the money sits in waiting until it is paid off, and you get the reward points.
    It’s a win all round! The challenge is to make sure you have the discipline not to dive in and access the funds – remember, if you can’t afford it, don’t buy it!
    FiL

    Reply

    • Steve Adcock December 21st, 2016 at 11:17 am

      I’m with you, FIREin’ London – more international support would be awesome. There may be similar companies in your neck of the woods…though not sure.

      Reply

  2. JMP December 20th, 2016 at 10:08 am

    We are currently helping my 17 yr old build his credit by allowing him to be the AU on one of our oldest accounts. Whenever he purchases something with the card, he has to transfer money from his bank account to mine, and then I make the payment. This seems like it would remove a step in this process and help him see the immediate impact of his spending. Great idea…looking forward to giving it a whirl!

    Reply

    • Steve Adcock December 21st, 2016 at 11:18 am

      Perfect! I was taught the very same way – credit cards aren’t meant to spend money that you don’t have. They are meant to spend money without carrying around a bunch of cash. :)

      Reply

  3. Keith "Shin" Schindler December 20th, 2016 at 7:39 pm

    I’ve been using Debitize for some time now and recently added a second card. Both earn rewards and both get paid off each month.

    My second card wasn’t initially compatible with Debitize, but Liran and Jeff made a point to get it hooked up.

    Those guys rock.

    It’s great to see that they’re looking into other ways for folks to use Debitize. I’ll be interested in seeing how it can be used to pay of mortgages faster.

    Any way, great article. Good to see others spreading the Debitize word.

    Reply

    • Steve Adcock December 21st, 2016 at 11:19 am

      Thanks Keith. I’m curious to see their mortgage offering as well. Anything that can help people pay off most people’s largest debts…the better!

      Reply

  4. Ten Factorial Rocks (TFR) December 21st, 2016 at 12:09 am

    While the idea is interesting, this is a flimsy business model. Debitize is merely one more intermediary you are sharing all your personal information with (both your credit card details and your bank account). All this hassle for the small discipline of auto-reminding yourself or even better, scheduling with the credit card company online to debit the entire outstanding balance on the due date. All credit card companies allow this scheduling option, and it achieves the same benefit as Debitize. Also, this way you keep the monthly “float” in your bank account rather than allow a third party to build a free float they can use on your cost. .

    Reply

    • Steve Adcock December 21st, 2016 at 11:20 am

      I think this service was designed for those who are probably less disciplined than others. It automatically pays your credit card bills, yes, but it also ensures that you actually have the money to do so through daily transfers. Could people do this themselves? Sure. But do they? Usually not.

      Reply

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