Update: $20 sign up bonus is no longer valid.
Debitize is a relatively new web based application (with a mobile application coming soon) that aims to help it’s users avoid credit card debt and better manage their money. The idea behind the application is to get all of the benefits of using a credit card (e.g rewards & zero liability protection) without the pitfall of overspending and going into credit card debt. Debitize was founded by Liran Amrany (previously worked as an Executive Director at JPMorgan) and Jeff Hu (Yale MBA). Each account is also individually insured by the FDIC for up to $250,000.
How It Works
The way that Debitize works is as follows:
- You link your credit cards to the application
- You link a deposit account (e.g checking account)
- Whenever you make a purchase on your credit card, Debitize will recognize the purchase and then pull funds from your deposit account and put those funds into your Debitize account
- When your credit card bill becomes due, Debitize will automatically pay your bill with the funds in your Debitize account. Debitize will pay your bill around one week before it’s final due date.
Additional Features
- Debitize will never overdraft your account. You can also set a minimum balance on your deposit account, for example the amount you need to pay rent or for day to day expenses.
- Ability to carry a balance. If for whatever reason you want/need to carry a balance on one of your credit cards, you can set this option up in Debitize.
- Debt Destroyer. This allows you to automate payments to help pay down debt over time as well as ‘debitizing’ your future purchases.
- Notification systems for any of the following:
- Low balance
- Large transaction
- Weekly summary of spending & balances
- Bill scheduled
$20 Bonus
As mentioned in the title of this post, Debitize have agreed to give our readers a $20 bonus for trying their application. The terms of the offer are as follows:
- $20 credit will be applied to your Debitize account and paid towards your next credit card bill as long as there are other funds that have been set aside in your Debitize account by then. We really just want you to give us a real try — if you do and don’t think Debitize is for you, just shoot us a note.
I’m sure the Debitize team would appreciate constructive feedback about their application, so if you have any please share it with them. You need to use this link to get the $20 bonus. As always we don’t receive any financial incentives from Debitize, we’re passing the full bonus onto readers.
Downsides To Debitize
As with anything, there are always some downsides to using something like this. I have two main concerns:
- Security. Whenever you give sensitive financial information out, you create another point of failure. Debitize doesn’t store your bank details, instead they use a company called Plaid to connect to your bank accounts (same company used by Betterment, Venmo, Accorns, etc.) There is also no functionality for funds to be moved from person to person so if somebody did gain access to your Debitize account they couldn’t move funds out of the account.
- Funds transfer. Funds aren’t instantly transferred from your checking account, they wait until the next business day. It’ll then take an additional business day for the funds to disappear from your checking account. This could erroneously lead to people thinking they have more money than they do, especially if you go on a shopping spree.
- You can currently only link one deposit account. For our readers with multiple accounts due to bank account bonuses, this could be an issue. They do plan to add functionality for multiple checking accounts.
- Not all credit card issuers are supported. Out of the main card issuers, American Express aren’t currently supported. This added functionality relies on Plaid so it’s not possible to get a good timeline on when American Express will be added.
- Debitize accounts do not earn interest. Funds in your debitize accounts do not earn any interest, so you’re forgoing whatever rate you would get from you checking account. This is their current monetization model, but they plan to also monetize by sending curated offers to users.
Our Verdict
I really like the idea behind Debitize, I hate people paying credit card interest fees and getting stuck in that cycle of debt and I do think that Debitize will be extremely helpful to consumers not spending more money than they have on credit cards (at least for people trying to avoid getting stuck in this trap). I personally don’t have this problem as I intentionally keep my spending a lot lower than my income, but there are several friends that I will recommend this tool to.
There are some downsides to the application, but I think the Debitize team are aware of these downsides and are actively making improvements to the application. I hope readers will provide useful feedback to Debitize in the comments and take advantage of the $20 offer.
Under downsides, I would have also included uncertainty about how much will be paid, and when, and if at all. I tried the service, but cancelled.
wasting people’s time is not funny, where is the sign up bonus mister?
They dont plan on paying bonuses just waste peoples time
Hi there, in fact we’ve paid over $1200 in bonuses to Doctor of Credit users. Please message us through the app if you think you are due a bonus that has not yet been paid and we’ll take care of it.
Curious if folks have seen their Debitize bonuses?
Have gone through a full CC cycle with the last month closing, Debitize withdrawing from my bank account, and using it to pay off the full balance due. Hoping to see the $20 credit soon
Hi Peter,
I’m sorry I have not visited the comments here for some time – but if you believe you should have gotten a bonus, please message us through the app and we’ll take care of it for you!
Thanks, Liran.
I should have posted an update/reply sooner, I received the bonus back in September!
where is the $20 sign up bonus?
It’s been more that a month and I still didnot get the bonus.
what gives?
Hi Winh, I’m sorry I have not visited the comments here for some time – but if you believe you should have gotten a bonus, please message us through the app and we’ll take care of it for you!
HI @Emily,
Believe we spoke through the site, but just to clarify for everyone else, we pay the amount due on your bill. In this case, the statement balance was $25 and there were $21 of new purchases that were charged after the statement date but before we scheduled payment.
We’re planning to launch a new feature soon that will also make a payment right before your statement date to optimize the utilization your bank reports to the credit agencies – stay tuned!
With debitize I have been twice falsely notified of fees from Mint. The notice cones from my checking account.
The transactions in question have the word debitize and then a random collection of letters containing the word ‘fee’ also. As example Debitize gdtttfr234fee512gg. This is recognized by Mint as a fee.
I have been using debitize since 02 August, when I first saw this post.It hasn’t lived up to my expectations, yet.
I was hoping that, at the end of each day, Debitize would withdraw an amount from my credit card account equal to my credit card purchases. It would then pay the amount when due.
In practice, Debitize seems to withdraw from my checking account on an unpredictable basis. One withdrawal last week, then two random withdrawals within two days. I use my credit card everyday.
The amount in my Debitize account also has remained consistently less than the amount of my credit card purchases, by approximately 130 dollars for the past 8 days.
I must say I don’t yet understand the service. My first bill would be paid on 02 September. Let’s see if it sends the correct amount.
Hi @Debo,
Thank you for your feedback. We initiate our withdrawals only after transactions post to your credit card (not for pending transactions). We found if we did it as soon as there was a pending transaction, many found it more confusing because then things like restaurant tips would show up as a separate withdrawal a day or two after the original charge. That being said, we’re certainly open to changing this or offering users the option if that would help.
With regards to your second comment – in order to ease people on to Debitize, we don’t take out your initial balance on sign up until we go to pay your first bill. So you will see that $130 difference withdrawn in the next few days, and then going forward your Debitize balance will always track your credit card balance. The reason for this was so people could see how Debitize worked for new purchases before we went to withdraw $1000s of dollars from their checking account if they had a larger balance. Good news though – we’re working on ways to give you more control over when and how that initial amount gets “debitized”.
As always, feel free to email us directly (suppot at debitize.com) if you have any questions on your specific account.
Thanks,
Liran
Seems like a really interesting concept and idea. I would use it for all 20+ of my credit cards if they had the option to pay my credit card bill daily or even weekly so that my credit card balance remains low. That way, I don’t have to login to every bank’s website that I have credit cards with once a week to make payments. I do this so that my credit utilization remains low..
Thanks for your note Ryan. We’re planning to add some features that optimize your utilization for you, so stay tuned. However, since it costs us money each time to send money to your credit card, it’s something that we would likely have to charge an additional fee for, depending on how many times during the month we paid your card.
Hi @Emily,
Thanks for checking us out. We’ll credit your account shortly after your first withdrawal, not in lieu of it. As mentioned above, we want to make sure people are signing up to use Debitize, not to get $20 free and then cancel.
With regards to your last question, that’s actually the exact point of Debitize. We set aside funds from your checking account every day to cover your purchases – otherwise we’d be just like your bank’s autopay. We hope to eventually add additional functionality for other use cases where people want less frequent withdrawals, but this is our primary focus right now. As mentioned in the article, we are letting you use your credit card like a debit card. We understand it might not be for everyone, but many people prefer the peace of mind of knowing they’ve already paid for their purchases – it’s the reason why debit cards are still so popular. If you only want the funds to be withdrawn once per month, that’s completely understandable, but you’re probably not our target customer, at least at the moment.
I’m with you – I’ve always been a credit card user myself. Started Debitize only after many friends of mine started switching to debit. Apparently Dave Ramsey is having a big influence on people…