The average American has four credit card accounts, and average credit card balances are around $6,200. It's not surprising that many people are looking for ways to pay down their debts. But figuring out how to go about it can be daunting.
Do you pay down the highest balances first? Focus on the highest interest rate cards before moving on to others? Or should you just divide your money equally among every card you owe? The Tally app makes answering those questions easy by doing it for you.
Sound good? Here’s what you need to know to make an informed decision about whether Tally is the right financial tool for you.
| Pros | Cons |
|---|---|
| Automates your credit card payments for faster, easier debt reduction | In some cases can make your debt reduction more complicated |
| Lets you make all credit card payments with a single payment each month | Requires a credit scores of 660 or higher to qualify |
| Offers a potentially lower interest rate line of credit for paying down debt | Might position you to run up more debt if you're not careful |
Tally calls itself an "automated debt manager." Technically, it's a credit card consolidation app that also builds in some account management functions for your credit card accounts. Using the app is pretty simple:
Tally is made for people who have multiple credit cards and are struggling to pay them off. The app monitors your balances, interest rates, and due dates for you. If you qualify, it will extend a line of credit to help you consolidate part of your debt at a lower interest rate. And if you opt in to its Tally Pays option, it will pay your credit card bills for you, calculating the best way to save you money based on the interest rates of your individual cards and your line of credit.
The app
claims that members have an average lifetime savings of $5,300.
If you have more than one credit card, that typically means managing multiple apps or online accounts to make sure you’re paying your minimum balances on time each month. With Tally’s Credit Card Manager, all your credit cards are in one place (as long as they are supported by the app), making it easier to manage and pay your debts. You can view the important details of each individual card within the app.
If Tally can offer you a Tally Line of Credit with an interest rate lower than what you're paying on your cards, it does. Tally will use your line of credit to pay off as much of your debt as possible. If the line of credit you are extended is too low to cover all of your existing credit card debt, it will prioritize which balances to pay down first. After that, you pay one bill to Tally each month to repay the line of credit extended to you.
If
your line of credit covers all of your existing debt, you simply pay Tally the
interest charges for using the line of credit instead. If you have a remaining
line of credit, you can have Tally use that credit to automatically pay your future
credit card bills. This is a revolving credit line. It renews as you pay it off
so you can continue to use it.
To qualify, you need a FICO score of 660. The app offers lines of credit with an APR between 7.90% and 25.90% (as of August 14, 2020). The APR varies depending on the Prime rate.
You can only use Tally Advisor if you qualify for the line of credit. Tally uses the information about your accounts to understand your debt and your spending habits. Then it makes payment recommendations to help you pay off your credit card debts faster. With this feature, you can set goals and track your progress, and use their calculator to see how much faster you can reach your goals by increasing your payments each month.
Tally keeps track of your credit card accounts and ensures your minimum monthly payments are made to avoid late fees. If you didn't already make a minimum monthly payment, Tally makes one within two days of the due date. You pay Tally back, plus interest accrued. It will pay even if you’ve used your entire Tally line of credit. Your cards are automatically enrolled in this program, but you can turn this off.
Individuals who have been a Tally user for at least 30 days and are in good standing are eligible to enroll in the app’s COVID-19 relief program. When you enroll in the program, Tally will stop paying your credit cards and your next payment to Tally will be deferred. You do not need to provide any documentation or proof of loss of income to enroll. If your account is already delinquent, it will continue to be reported as delinquent to the credit reporting agencies.
One of the biggest benefits of the Tally app is
that it gives you an easier way to manage your credit card debt. If this app
works for you, you can simply make a single payment and know that your credit
card bills are being covered. Tally also offers a lot of features meant to keep
you on time with your credit card payments. That can help improve your credit
score over time. The Tally app might be especially beneficial for keeping up
with credit card payments during periods of short-term financial duress, such
as many people are experiencing during the coronavirus pandemic.
Depending on the APR you qualify for with your
Tally line of credit, you could save quite a bit in interest fees. The app is
free to download and never charges any additional fees beyond your interest
rate.
Perhaps the biggest downside to the Tally app is
that it doesn't keep you from spending with your credit cards. It is easy to
continue adding to your debt rather than paying it off. You can take out a line
of credit with Tally and bring your credit card balances down, but if you're
not careful, you could spend again and run up your debt. However, this is also
a risk with other types of credit card consolidation.
Another downside to the Tally app is that things
can get complicated. You still get
statements from your credit cards, and you have to track what Tally's paying
versus what you're paying—if you're paying anything.
For example, your Tally line of credit might
come with an interest rate that's lower than some of your cards and higher than
others. In this case, you might not want Tally to cover payments on the lower
interest rate cards, and you’d have to pay those yourself.
The Tally app is not available to everyone: It’s currently offered in 30 states and Washington DC. If you live outside of those states, you can get on a waiting list to be informed when the app is offered where you live. Not all credit cards are eligible—Tally works with a limited number of banks and stores.
You’ll also need a 660 credit score to be
approved for a line of credit with Tally, which may exclude those who could
most benefit from their help. You also need to be over 18.
If Tally doesn't sound right for you, there are other options to consider when it comes to managing credit card debt.
[schumerbox api_url="https://static.ccom-cdn.com/marketing-services/external/v2/offers?end_user_type=BLOG&offer_type=CREDIT_CARD&affiliate_id=32806&cardId=upgrade-triple-cash-rewards" button_text="Apply Now" button_color="green"]
The Tally app offers a service that can be
helpful for many people. If you're struggling to manage your credit cards or
are likely to forget monthly payments, Tally can keep everything in line for
you. But, as with any tool, it's important to do your research and understand
the details before deciding if Tally is right for you.