AI Financial Advisors target young people living paycheck to paycheck

Leaders in artificial Intelligence companies often ask users (and investors) to imagine a not-so-distant future where… Amnesty International Trained on personal data and past interactions, coaches help users achieve their wildest dreams. Want to be more active? Here’s an exercise designed by artificial intelligence. Do you want to monitor your health in the long term? Try this AI-powered health app. Want to fix your money problems? There’s a personal finance chatbot for that. Multiple, in fact.

My goal is to be debt-free by the end of 2025, and as a reporter who often tests new software, I was curious to try out some of the AI-based financial advisors that have gained popularity in recent years. Hiring a human money manager can easily cost a few thousand dollars, so more people, especially younger users, are turning to AI tools for advice. One of the best Apple charts for free Finance applicationsI decided to try two well-reviewed options that offer chatbots aimed at solving financial problems: Cleo i and shining.

Both Cleo AI and Bright encourage users to link their bank accounts to the app through a third-party service called Plaid. This is allowed Chat bots To break spending habits, help users pay off debt, and build credit. “Based on the bank data and what you’ve told us, Clio will be your best friend or your coach,” says Barney Hosie Yu, CEO and founder of the company. “It will provide you with the right advice and the right products to help you make better financial decisions.”

That’s fair enough, but some of the guidance Cleo gave me deviated that way. Although it had engaging moments, such as a friendly roast highlight where I overspent in unnecessary ways, the generative AI tool seemed mainly occupied with using… Personal data For sales opportunities. Bright was the same.

For example, I started one conversation pretending to be sad and not having enough money to buy groceries. According to Hussey-Yeo, the core demographic of Cleo users is young people who live paycheck to paycheck and “feel the pain of finances more than most people.” So I thought this would be the kind of thing users share all the time. Android Feigned sympathy She immediately started encouraging me to check if I qualified for a cash advance through the app.

After Cleo cleared my eligibility for a cash advance, I was asked to sign up for a $6 monthly Cleo Plus membership. The first time I used it, the app offered a cash advance of $130, split into $65 over two days. Users technically don’t have to pay a fee for the cash advance if they’re willing to wait three to four business days — a difficult feat for people who live between paychecks and the distraction of my goal of paying off past debt.

Cleo also offered me a same-day money transfer if I agreed to pay the $8 express fee. This means I will have to pay back the $73 after about a week of down payment. After it didn’t work my first time, the app raised the total limit to $200 the next day, splitting it into two $100 parts. According to Hussey-Yeo, about a third of Cleo’s revenue comes from cash advances, while the rest is paid through subscriptions and a card designed to help users Boost their credit scores. Ultimately, Cleo felt like a temptation to take on additional short-term debt, rather than a real solution to my financial problems.

Although Cleo doesn’t currently include offers for larger loans, Bright’s financial chatbot, which is marketed as an “AI debt manager,” does. A subscription to Bright’s AI assistant costs more than $39 for three months of access, but it also promises access to more money, up to $10,000 through third-party lenders. Compared to other financial chatbots I’ve tested, Bright’s output included more confusing errors, such as claiming that I lost more than $7,000 in non-funding fees over the past month, an amount that is absurdly false.