Reviews

Bright Money Review (2022): Pros, Cons and Expert Analysis

Bright Money Review
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Bright (often referred to as Bright Money) is a financial management app with an emphasis on helping you pay down your credit card debt, improve your credit score and build savings.

In this Bright Money review, I’ll analyze the app from my perspective as a CFP® Professional.

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Bright is a useful app for those on a fixed income, who are living paycheck to paycheck, or who are struggling with credit card debt. It provides straightforward guidance for paying down credit card debt and facilitates payments to the right credit cards at the right times on your behalf. Bright determines the optimal payoff amount by analyzing your spending, credit card balances, APRs and cash on hand. If you're struggling to get started paying down credit card debt, Bright can help.

Pros:
  • Provides an optimized plan for paying off credit card debt.
  • The 10-day free trial gives you full access to Bright.
  • Offers payment protection insurance.
Cons:
  • Only provides assistance with credit card debt (doesn't help with other types of debt).
  • Not ideal for someone with a variable income.
  • Monthly fee of up to $14.99.

Bright Money at a Glance

Unlike other apps that give you advice about which debt to pay off first or how much to save, Bright goes a step further by automatically withdrawing funds from your checking account and applying those funds to your financial goals.

Bright’s main focus is on helping you pay down credit card debt, but it can also be used to build your credit score and/or save towards short-term financial goals, such as building an emergency fund.

A simple way to think of Bright is that it automates the process of paying yourself first. Instead of waiting until the end of the month and seeing what’s left over to pay down your credit card debt with, Bright sets aside money throughout the month based on what you can afford. 

This strategy to manage your money is one of the most time-tested and proven strategies available. However, users must be comfortable with Bright not only having access to their financial accounts, but also the ability to make transactions on their behalf. 

The company was started in 2019 by Avi Patchava and Petko Plachkov. Bright’s growth up through 2021 helped them secure $31 million in Series A funding from Sequoia, Falcon Edge and Hummingbird Ventures. 

What’s Behind MoneyScience?

Bright’s AI technology — which powers its recommendations and automates transactions on your behalf — is called MoneyScience.

When you sign up for Bright, you’ll be asked about your goals (either increase your credit score or pay off credit card debt), your gross annual income, your full name and your address. Then you’ll be asked to link your primary checking account.

Bright asks about your financial goals during the sign-up process.

Tip: Bright asks you to link only your checking account at first. It then pulls your debt balances from your credit report. However, the balances shown on your credit report are not updated in real-time. After the initial sign-up process is complete, you have the option to link your credit card accounts for real-time syncing. This will help Bright pull better data for your recommendations.

When you create a Bright account, you’re opening an FDIC insured savings account, referred to as Bright Stash. Money from your existing checking account is transferred to this Bright Stash account every 2-3 days, based on what Bright calculates you can afford. 

Once transferred, the money is allocated based on what Bright’s algorithms determine is the highest and best use of those funds based on your financial goals.

If you don’t want the automatic transfers to take place at these intervals (known as Smart Pace) Bright does allow you to choose weekly transfers, transfers each time your paycheck hits, or manual transfers.

To get a sense of how Bright works, it’s best to break down what Bright does to help you achieve specific financial outcomes. Among those outcomes are paying off credit card debt, increasing your credit score and saving towards short-term goals.

How Bright Helps You Pay Off Your Credit Card Debt

Most Bright users come to the app for assistance with paying off debt (and to be specific, credit card debt). 

Bright helps with this by analyzing your existing credit card accounts, including your balances, APRs and minimum payment amounts.

Bright also has access to your spending habits, and it uses that information to determine how much you should be paying towards your credit card debt (in addition to which credit card debt should be prioritized).

By default, Bright recommends the debt avalanche method to pay off your credit card bills. This is where you’re paying the credit card with the highest APRs first, focusing only on one credit card at a time. 

Example of a financial goals sequence recommended by bright.
Example of a financial goals sequence recommended by Bright.

However, you do have the option to select the order in which you pay off your cards. Therefore, if you want to change to the debt snowball method, or pay off a certain card first, you can.

Learn more: Debt avalanche vs. debt snowball.

By default, Bright uses Smart Pace to determine the frequency of transfers. With Smart Pace, Bright is constantly monitoring your accounts, and may transfer funds into Bright Stash as often as every 2-3 days. If preferred, you can make payments weekly, each time your paycheck hits, or manually. 

Choosing a Bright Money payoff frequency.
Choosing a payoff frequency.

Bright determines how much to pay towards your credit card accounts by analyzing your checking account balance, upcoming bills, expected non-bill expenses (e.g. food and gas) and the minimum checking account balance you should maintain. 

Here an example of how this could work:

Current checking account balance:$2,500
Upcoming bills:$1,000
Upcoming non-bill expenses:$370
Min. checking account balance:$1,000
Bright pays:$130

This isn’t some one-time transfer; Bright makes these small transfers constantly (as often as 2-3 days). So if you receive unexpected income beyond your typical paycheck, Bright will put that money towards your debt within just a few days. 

How Bright Can Increase Your Credit Score

There are five factors that determine your credit score: payment history, credit utilization rate, the age of your accounts, new credit inquiries and credit mix.

First, Bright helps you improve your payment history by automatically making the minimum payments to the right cards at the right times. Second, Bright helps you lower your credit utilization rate, which is the amount of credit card debt you’re carrying on any given card compared to the card’s credit limit.

Inside the app, Bright displays your credit utilization rate, payment history, age of credit, and the number of credit inquires on your report.
Inside the app, Bright displays your credit utilization rate, payment history, age of credit, and the number of credit inquires on your report.

Bright recommends that credit cards have less than a 30% credit utilization rate. If you set a goal to increase your credit score, Bright will prioritize payments to the credit card with the highest credit utilization rate and even make a second payment if necessary. 

This is one of the fastest ways to increase your credit score, and is helpful for those who expect to apply for a mortgage or auto loan within the next few months.

How Bright Helps You Increase Your Savings

The app provides a customized Bright Plan, which is a long-term financial plan that shows each goal Bright will help you with (and when).

Those familiar with Dave Ramey’s Baby Steps will recognize the strategy Bright leverages here — specifically, focusing on one goal at a time with the emphasis on first building a small emergency fund and paying off high-interest debt.

During my testing, Bright recommended the following goals in the order shown below:

  1. Pay off the highest-interest credit card first.
  2. Build an emergency fund of $1,000.
  3. Pay off remaining credit card debt.
  4. Save for future short-term goals, like a vacation, tuition or wedding.
  5. Start investing 5% of my monthly income.
  6. Build target wealth.

Note: For purposes of this review, I didn’t include my emergency fund savings account when setting up Bright, so that I could get a better sense of how the service works when one is in credit card debt. 

It’s easy to debate this order based on individual circumstances. For example, if one has a 401(k) match, I’d argue it’s a better idea to focus on maximizing that match before saving for short-term goals.

If you’re past the stage where you’re paying off high-interest credit card debt, this is where creating your own customized financial plan can potentially help you accomplish your financial goals at a faster pace.

With regards to target wealth (item number six in the list above): during onboarding, Bright asks you your desired net worth. Bright then works to build you to a savings rate that would help you achieve that goal.

Bright vs. Tally

Tally is another useful app for those looking to get out of credit card debt, though it takes a much more aggressive approach than Bright.

Tally gives you a personal line of credit (at a lower interest rate than your existing debt), and uses that credit to pay off your high-interest debt. You then pay off your personal line of credit to Tally. In order to qualify for the line of credit, you need a minimum credit score of 660.

Tally doesn’t focus on helping you build your savings or reach other financial goals — it’s exclusively designed to help you get out of credit card debt.

Learn more in our Tally Review.

Bright vs. Savology

While Tally focuses specifically on credit card debt payoff, Savology is similar to Bright in that it gives you a personalized financial plan.

However, as a financial planning tool, I think Savology is far superior to Bright, thanks largely to the comprehensiveness of the financial plan it provides. 

Unlike Bright, Savology gives you a step-by-step plan for what to focus on next, and it takes in a much larger number of inputs, such as retirement balances, insurance coverage and your estate plan.

If you’re past the credit card debt payoff stage and are looking for some customized financial advice, you can read more in our Savology Review.

Bright Money FAQ 

Does Bright cost money?

Bright does cost money. There are three payment options ranging from around $7 per month if paid annually to around $15 per month if paid monthly. 

Is Bright secure?

Bright is secure in that it uses Plaid to connect to your existing checking account. Plaid is the industry leader in financial information sharing, offering high-level security. Your savings account with Bright is FDIC Insured up to $250,000. To log in to the app, a pin number or face scan is used, so there’s an extra layer of security

Are Bright support staff CFP® Professionals?

Bright is unique in that it has 24-7 chat support. Testing the chat features, I was able to reach support within minutes on a number of occasions. While support staff are knowledgeable about Bright’s software, they are not financial advisers and can’t give you financial advice.

Is the Bright Money App Right For You?

Bright is helpful for individuals struggling with credit card debt who are not sure about the best method for paying off that debt. People in this situation can benefit most from finding a qualified financial adviser, but when you’re in debt it’s hard to make the commitment to pay for advice.

Bright serves as a viable alternative. It uses one of the best strategies for improving your financial life, paying yourself first, and automates that strategy.

But Bright is less useful for those who don’t carry high-interest debt and may have even started to invest their money. In fact, Bright doesn’t offer any guidance or ask any questions related to tax-advantaged accounts like 401(k) or IRAs, which would best serve their user in maximizing their investment gains.

R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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