Ready for Zero (YC S10) wants to help Americans get out of debt.

http://techcrunch.com/2010/09/01/readyforzero-wants-to-help-you-get-control-of-credit-card-debt/

by ithayer • 16 years ago

81 52 16 years ago

techcrunch.com

keyle2• 16 years ago

That's really good! I'd like an app that will help repay my mortgage quicker, coming with plans etc.

Also I can't help but notice that techcrunch is basically an advertising platform for pretty much anything YC funded.

It's like if you get funded, you get something that floats, boom, you're on techcrunch.

I'd even say that a feature article on TC would help more than the original funding...

jackowayed• 16 years ago

You might be able to argue that it's worth more than the ~$17k, but there's no way it's worth more than the advice, the ridiculous productivity because you have to tell everyone what you've gotten done every Tuesday, the intros to investors, etc.

keyle2• 16 years ago

yeah from outside, I have no idea about all these things. I'm sure you can't put a price on experience. I'd love to be a part of it but I guess it's not in my path :)

albahk• 16 years ago

I've heard ex-YC'ers claim that the money is the least significant part of the whole YC process with contacts, mentoring and the guaranteed Techcrunch coverage obviously being much more useful than the $20k.

city412• 16 years ago

I'm all for any ideas that can help America get out of debt. It's also great to see someone step in and fill in the hole that MS Money left (it had a fantastic debt wizard/planner, I was sad when MS announced they are killing it, despite how buggy the app always was).

I do wonder if this site can really reach the market it's after. In my anecdotal experience, the people that are in massive debt don't really have the discipline or organization to get out of it, even with a great tool to help them. If they did, they probably wouldn't be in as much debt to begin with.

jsankey• 16 years ago

I do wonder if this site can really reach the market it's after.

I think this is the big question. I really love this idea, because too many people are struggling unnecessarily because they don't realise the true impact of credit card debt. Having something that clearly shows them this impact is a great idea. But I find it hard to believe they will seek something like this out, so it's going to be tricky to reach them.

I was thinking about the very problem yesterday, and wondered if it would be worthwhile requiring information like this to appear on all credit card statements. Instead of just highlighting a minimum payment, what if the statements also had to outline the impact of higher payments somehow? It could be the only reliable way to get the information to the people that could benefit most.

martin• 16 years ago

Something like this is required as part of the recently enacted CARD act (in the US):

"Credit card issuers must disclose to cardholders the consequences of making only minimum payments each month, namely how long it would take to pay off the entire balance if users only made the minimum monthly payment. Issuers must also provide information on how much users must pay each month if they want to pay off their balances in 36 months, including the amount of interest." (http://www.creditcards.com/credit-card-news/help/what-the-ne...)

ergo983• 16 years ago

Sorry, but this one is going to fail miserably.

sorbus• 16 years ago

Why do you think so?

ergo983• 16 years ago

There is almost nothing there, in an industry absolutely saturated with loads of people with a lot of something. The business plan right now appears to be "a simple Google Spreadsheet with a lot of annoying maintenance and superficial value-add surrounding it".

The pie-in-the-sky fantasy land of future low interest credit card leads [which is the exact opposite of the sort of offers such a site would get. The best would be predatory, secured credit-card type offers] and automatic...something...it just has the aroma of failure. It could as easily be a "lose weight today" website where you enter your desired weight and it tells you to eat less daily. Which...if such a site existed...I think we would all laugh at.

jeromec6• 16 years ago

I'm really glad to see this. I'd say it could count as a public service as well. What I hope the site will also offer is counseling on developing better spending habits in addition to the tracking/organizing of repayments. The crowd that visits HN is probably already pretty wary of the credit card game/trap, but too many Americans get pulled underneath unmanageable debt burdens before they really know what's happening.

I had a neighbor who had simple, yet fantastic advice: if you can't afford to pay for it cash, don't buy it. This guy was your average American, with a middle class job, but during his retirement years I noticed he bought a new porsche and humongous RV. I have to wonder if he bought those cash too, but I wouldn't be surprised. He had rental property, all his debts paid off I'm pretty sure, and all because of simple yet powerful financial common sense.

It actually angers me to see some of the interest rate schemes and fees banks deliberately put in place to take advantage of unsuspecting debtors. A site like ReadyForZero is timely in the midst of the worst economic crisis since the Great Depression. If 70% of our economy is based on consumer spending, it make sense to strive to keep Americans in a position to spend comfortably.

jacquesm12• 16 years ago

Debt is a huge trap. And consumer debt is being rammed down peoples throat in a way that should be illegal.

mrkurt2• 16 years ago

This is one of the areas where education in the US is really horrible. This stuff isn't rocket science, but people really have no clue what it means to get a car loan or carry a balance on a credit card, or even understand mortgages. It's depressing.

jeromec6• 16 years ago

Loan sharking is illegal, but I sometimes wonder how far banks are from that... States craft laws for maximum interest rates, so the banks relocate to where they can charge the most. The highest allowed currently is 29% I think. Ridiculous. If 100% interest was allowed I don't think a single bank would exercise restraint.

jacquesm12• 16 years ago

The site is still invitation only.

Here's a little plan I came up with for someone, not quite 100% applicable but it worked pretty good:

(1) cut up your cards

Tough ? Yes, absolutely, very tough. But step one of getting out of a hole is to stop digging, so stop spending money that you don't have.

(2) cancel: cable, newspapers, any and all subscriptions, internet and cell phone included if you don't need them for your job. If you do need internet see if you can make a deal with a neighbour, especially easy if you have a laptop with wifi.

These are not essentials in your life, you can do without them until you can afford them.

(3) stop smoking, stop drinking

Besides making you unhealthy this stuff is habit forming and costs you a bundle, even if you don't really notice because it's only a few bucks at the time.

(4) if you've bought stuff that you don't actually need, sell it. Liquidate it, set a price on what you realistically think it is worth and try to raise that money by selling it for cash.

(5) stop eating and drinking outdoors. Restaurants and coffee shops make a profit, that means that you can cook for yourself and make your own beverages cheaper. Sure, it may not be that luxury latte that you've come to depend on but it adds up.

(6) pursue ways in which you can earn more than you do today (this can be hard, it did not work out for my friend, maybe you have more luck)

(7) list each and every expense you make, look at the list at the end of the week and be critical, could you have saved on any of them? If you could do not repeat that spending in the next week!

All these steps together should give you a bit of money on a repetitive basis that should go towards paying off your debt.

That's cumulative, any money that you spend over and beyond the required interest payments will come back the next month as a further reduction in interest to be paid. So next month you can pay back more on the principal and so on.

Do not fall back in to old habits, be strong and look at your debt decreasing as a motivator.

I'm really happy that the 'readyforzero' people built this. That's one of the nicest start-ups ever to come out of YC, in terms of the 'change the world' attitude.

innovate3• 16 years ago

we're actually letting people through to register as well but have throttled initial registrations so many will get an invite page. thanks for the support and feedback.

jacquesm12• 16 years ago

Probably a silly question, but how do you intend to monetize this? Getting people out of debt is a great goal, but that means it's going to be pretty hard to charge them for the use of your tools (it would defeat the purpose).

Lewisham2• 16 years ago

How long are invites going to take? I'd love to take a look at this; my recent wedding has simply wiped me out. I'm not sure what to do, and having a better idea or what needs to be done would be a real boon.

stoney• 16 years ago

I don't completely agree with your 5th point. By the same argument, auto manufacturers make a profit, so don't buy a ready made car - you can make it cheaper yourself! (Maybe the part about auto manufacturers making a profit is a bit shaky these days)

Sure, going to Starbucks is not a good use of your cash if you can't afford it, but where I am some of the cheaper restaurants can give me a decent meal for around the same as if I cooked it myself. They get their ingredients cheaper than I could and they make their money from the wine that I buy to go with it.

jacquesm12• 16 years ago

Making a car requires a very large investment in capital that you only recoup if you make lots of cars, so buying a car from an established manufacturer is cheaper than making only one.

Making food requires less in outlay than it does to buy ready made food.

> where I am some of the cheaper restaurants can give me a decent meal for around the same as if I cooked it myself.

Ok, that's different from where I live. Here eating out would easily cost 3 to 4 times as much per person as it does to home-cook.

Also, you have to factor in the cost of transportation if you do not have a cheap restaurant nearby.

> They get their ingredients cheaper than I could and they make their money from the wine that I buy to go with it.

The restaurant slogan is 'they eat you poor, they drink you rich'.

Retric• 16 years ago

You skipped over the biggest one for most young people with a good job. Get a roommate!

I got a roommate which saves me 600$ a month and I should be out of high interest debt within 9 months. (Still going to owe 6k @ 4.9% and 9k @ 2.9% but there is little point in paying those off early.)

Edit: Also if you keep one high balance CC you can reduce the amount of savings you need to keep liquid in case of emergency. AKA 2k in your checking account is a great idea, unless your also paying 12% interest on credit card debt.

jacquesm12• 16 years ago

Good one, never thought about it. I'm too old to think in terms of room mates but you're absolutely right.

anamax• 16 years ago

> (7) list each and every expense you make, look at the list at the end of the week and be critical, could you have saved on any of them? If you could do not repeat that spending in the next week!

It turns out that (7) is more than sufficient for the vast majority of people. In fact, most don't even have to look at the list - they can throw it away, unread, each night.

There's something about writing down each transaction that gets people to spend far more wisely.

FWIW, the same applies to eating as well. Want to lose weight and/or eat better? Write down everything that gets to your stomach that isn't water. (Yes, even diet soda and unsweetened tea/coffee.)

kirpekar• 16 years ago

Dave Ramsey would like something like this.

nopassrecover• 16 years ago

How are they dealing with the "we're not financial planners so this isn't financial advice" thing? (or is that not an issue in the US?)

Ready for Zero (YC S10) wants to help Americans get out of debt.

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