By Emily Guy Birken
If you are carrying balances on multiple credit cards, it can be confusing to figure out the best way to make your monthly payments to minimize the interest you pay. Should you follow the "debt snowball" method to pay off your credit cards from lowest balance to highest? Or should you try to pay off your highest-interest cards first? And which card charges the highest interest, anyway?
This difficult equation becomes even tougher if you also struggle with organization, since you not only have to keep track of how much money to apply to each credit card, but you also have to stay on top of all of your due dates to avoid late fees.
That's where Tally comes in. This fully-automated and fee-free app does the math for you to determine the most efficient way to pay off your credit cards. It also handles the payments for you, ensuring that you never pay a late fee again.
How Tally Works
Users start by downloading Tally's free mobile (iOS or Android) app, and then scan pictures of each of their credit cards. Tally does a soft credit check, since only users with a minimum score of 660 will qualify. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
Once the user is accepted, Tally will analyze their credit card balances, interest rates, minimum payments, due dates, and the like, to figure out the most efficient way to pay down all the user's credit card debt. From there, Tally will offer the user a new line of credit at a lower interest rate than they are currently paying with their credit cards. Tally's Annual Percentage Rates (APR) range between 7.9% and 19.9%, depending on your credit history.
That credit line is then used to pay the user's credit cards in the smartest and fastest way possible. The user can now simply pay Tally once per month, instead of juggling multiple credit card payments. The app's algorithms will calculate a minimum payment per month for users that includes the minimum due on each credit card, the interest due to Tally, and a portion of the principal owed to Tally.
After six months, if you are paying down your debt and continuing to pay Tally on time, you will receive a lower interest rate or a higher credit limit. Even if you just pay the Tally minimum each month, the company's CEO Jason Brown claims that you will be able to pay off your debts within twelve years. That's ten years faster than what you'd accomplish if you just paid the minimum for each card. The on-time payment of your credit card accounts should help raise your credit score.
Who Will Benefit from Tally?
The service offered by Tally can certainly help credit card borrowers who are struggling with multiple cards, but DebtFreeGuys.com personal finance author and blogger John R. Schneider III cautions that it's not necessarily for everyone: "Tally is great for people with a credit score above 660 with enough debt to consolidate into one loan and the mindset shift to become debt-free. That means it's the ideal app for the ideal candidate."
In other words, borrowers who are still living with a spending mindset may not be able to use Tally to help dig themselves out of debt.
Tally Advisor, a free new feature on the app, can help users who need extra motivation to become debt-free. The Advisor feature helps you determine a specific date when you will pay off all of your debt, based on your income, spending, current balances, and overall debt levels. This kind of specific goal-setting can provide many users with the push they need to pay off their debts.
Tally is currently only available to consumers in Arkansas, California, Colorado, Florida, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Texas, Utah, Washington, and Wisconsin. The company regularly adds new states.
Tally Could Make Paying Your Credit Cards Easier
While this app may not work for everyone, Tally can offer you an automatic way to make multiple credit card payments every month, reduce your interest, and eliminate your late fees at the same time.
If you want more credit, check out our list of credit card offers.
Photo ©Tally Technologies, Inc.