NEW YORK (MainStreet) — Most companies encourage consumers to spend more money with rewards points, but one new website hopes to do the opposite and use rewards to incentivize consumers to save more and pay down their debts.
The website, Saveup.com, essentially turns personal finance into a clever game. Any time a user deposits at least $1 into their savings, IRA or 401(k) accounts, or makes a payment toward their mortgage, car loan or credit card debt, he or she will earn a credit. That credit can then be used to enter a raffle for a wide range of products from travel and cash offers to other accessories. So with each savings or debt reduction action users take, they earn themselves another chance at receiving a prize.
“In the current economic environment, a lot of Americans are looking for ways to increase their savings and pay down their debts. So we looked around globally for different financial innovations to find a way to drive consumer behavior towards asset development,” says Priya Haji, CEO of SaveUp.com. One model that caught the group’s attention was Britain’s premium bonds option, which enters bondholders into a monthly lottery for various prizes.
SaveUp.com is still in an early testing stage and the site won’t be open to the public until sometime this fall, but already it’s earning some buzz and some serious investments, securing $2 million in venture capital funding earlier this week.
When the site officially launches, Americans from more than 18,000 banks and credit unions will be able to sign up for free and sync their financial accounts to it, much in the way they do with budgeting services like Mint.com. This way, each time users deposit money or pay down loans, the service will register it automatically and award them credits. Consumers will also be able to earn credits by watching financial education videos on the site.
Needless to say, users won’t win something every time, or perhaps even very often. As Haji explains, it depends entirely on how they choose to play the game. Big-ticket items – including what Haji refers to as “life-changing amounts of money” – will be more competitive than smaller prizes and therefore harder to win, but the hope is that just the possibility of competing for these prizes will keep consumers making the best financial decisions.
“The more that you actually take the right actions in your own financial life, the more chances you are getting to have something unexpected and amazing happen,” Haji says. “This is the new direction for rewards, something that is more aligned with where Americans are right now in terms of increasing savings and assets.”
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