Announced earlier today the new Digit Pay service, which uses savings in a Digit account to pay off credit card debt for any registered account.
The new feature works by enabling users to create a "credit card debt" goal in their Digit settings and activate the Digit Pay service. Digit automatically will begin to save money from a linked checking account -- and use those funds to pay off credit cards. Credit card payments can even be prioritized through Digit's boost feature.
So far, the Digit app has been used to save roughly $1 billion for its customers according to chief executive officer Ethan Bloch .
Bloch says that Digit has been focused on solving the biggest financial pain points for the most customers it can reach in the U.S. For the company, that meant starting with savings.... and moving on to the next biggest threat to customers' financial health in the U.S. -- debt.
Roughly 75% of the company's customers have credit card debt (hi, my name is Jon and I'm a Digit customer).
In the U.S. there's about $1 trillion of credit card debt outstanding -- a stat that's very no bueno for the U.S. economy. Add to that, an average U.S. household owes about $16,883 and pays about $1,292 in interest each year (credit card companies thank you).
For folks who need a refresher in how Digit works, the company's app provides a service that connects to checking accounts from almost any bank . Digit's software analyzes income and spending and then sets aside small amounts of money at intervals that won't impact an account. The company offers a 1% annualized savings bonus for people who save with Digit for three months, and the service costs $2.99 per month after a free 100 day trial period.
Those savings are placed in a rainy day fund or toward any other financial goals that a user sets in the app. They can be customized, and the latest customization is this Digit Pay option.
It's the first time that Digit is linking back out to other vendors and it paves the way for other services using the Digit balance.
One thing that users shouldn't expect to see anytime soon is an investment feature in Digit, according to Bloch. "Digit was founded to make financial health effortless," Bloch said. While investment tools are good for helping their users make more money, Bloch said they weren't core to his view of financial health.
"We'll be focused on those two... savings and credit card debt," he said.
- This article originally appeared on TechCrunch.