AI financial advisors target young people living paycheck to paycheck

Leaders in artificial intelligence companies often ask consumers (and investors) to imagine a not-so-distant future where AI coaches trained on personal data and past interactions help users achieve their wildest dreams. Want to be more active? Here’s an AI designed workout. Want to monitor your long-term well-being? Try this AI health app. Do you want to solve your money problems? That’s what a personal finance chatbot is for. Many, actually.

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 ​​financial advisors that have gained popularity in recent years. Hiring a human money manager can easily cost several thousand dollars, so more people, especially younger users, are turning to AI tools for advice. From Apple’s top charts for free finance applicationsI decided to try out two well-reviewed options offering chatbots designed to solve money problems: Cleo AI and Bright.

Both Cleo AI and Bright encourage users to link their bank account to the app through a third-party service called Plaid. This allows for chatbots to eliminate spending habits, to help consumers pay off debt and build credit. “Using your bank data and what you’ve told us, Cleo will be your kind of confidant or coach,” says Barney Hussey-Yeo, the company’s CEO and founder. “She will provide the right advice and the right products to help you make better financial decisions.”

Honestly, some of the guidance Cleo gave me went off track this time. While there were fascinating moments, such as a friendly roast highlight where I went overboard with unnecessary means, the generative AI tool seemed mainly preoccupied with using my personal data for bidding opportunities. Bright was the same.

For example, I started a conversation pretending to be sad and not have enough money to buy groceries. According to Hussey-Yeo, Cleo’s main user demographic is young people who live paycheck to paycheck and “feel the pain of finances more than most people.” So I thought this would be something users share all the time. The bot feigned sympathy and immediately started encouraging me to check if I was eligible for a cash advance through the app.

After Cleo confirmed that I was eligible for a cash advance, I was prompted to sign up for a $6 monthly Cleo Plus membership. The first time I used it, the app offered a $130 advance split into $65 increments over two days. Users technically don’t have to pay a cash advance fee if they’re willing to wait about three to four business days—a difficult feat for people living paycheck to paycheck and a distraction from my goal of paying off previous debts.

Cleo also offered me a same-day money transfer if I agreed to pay an express fee of $8. That would mean I would have to pay back the $73 about a week later for the advance. After I didn’t go through it my first time, the app increased my total limit to $200 the next day, split into two increments of $100. According to Hussey-Yeo, about a third of Cleo’s revenue comes from cash advances, with the rest through subscriptions and a card designed to help users improve their credit scores. In the end, Cleo felt more like a temptation to take on additional, short-term debt than a real solution to my money problems.

While the Cleo app doesn’t currently include offers for larger loans, Bright’s financial chatbot, touted as an “artificial intelligence debt manager,” does. A subscription to Bright’s AI assistant costs more, $39 for three months of access, but also promises access to more money, up to $10,000 through third-party lenders. Compared to the other AI finance chatbot I tested, Bright’s results included more confusing errors, such as claiming that I had lost over $7,000 in insufficient funds fees in the past month, a ridiculously wrong amount.