- Cost: Free app; APR for your Tally credit line is between 7.9% and 25.9% per year
- Features: Late fee protection; single monthly debt payments; automatic payments to credit cards; smart Tally Advisor
- Advantages: Simple credit card management; Tally’s APR can save money compared to your credit card; advanceable line of credit; soft credit pull; no compound interest
- Disadvantages: Requires a FICO Score of 660 or higher; APR doesn’t always save money; debt avalanche strategy isn’t for everyone
Consumer debt in America is a growing problem. Out of all debt categories, credit card debt is one of the most common. In fact, each household with a credit card has nearly $8,400 in debt on average. Furthermore, credit card loans have crossed the $1 trillion mark in the U.S. alone.
There are numerous reasons to get out of debt. Less stress, earlier retirement, better relationships, and more security are just some of the benefits of becoming debt free. Yet, as you might know, becoming debt free is often easier said than done.
If you want to overcome your credit card debt once and for all and save money in the process, be sure to give Tally a closer look.
What Is Tally?
Tally’s main purpose is providing debt consolidation. To help you save money, Tally identifies your highest-interest credit cards and uses its own line of credit to help pay off your credit card bills. Because Tally charges a lower interest rate than your high-interest credit cards, you pay less in interest in the long run.
Tally simplifies your debt payoff journey and helps you save money thanks to several key features:
1. Save Money on Interest
Tally is most powerful if you have significant high-interest credit card debt to tackle and receive a low APR from Tally. Plus, the debt avalanche method is incredibly efficient for high-interest debt because, in the long run, paying off high-interest cards first saves you the most money.
It can be difficult to stay motivated and to consistently tackle this debt alone. However, Tally automates everything, ensuring you stay on track and prioritize your most damaging debt first.
2. Simple Card Management
An advantage of debt consolidation is, of course, lower interest payments. However, debt consolidation and Tally’s intuitive app also streamlines your entire debt payoff plan.
Tally keeps managing multiple credit cards simple. You only pay one bill per month regardless of how many cards you add to the app. Additionally, you can view the details for each card and outstanding debt in a central dashboard if you want a complete snapshot of your finances.
If you’re tired of complicated spreadsheets and missing payments on cards, Tally is an excellent alternative to try.
3. Smart Debt Manager
As you spend, Tally automatically creates a personalized plan for how to efficiently pay off your credit cards. You can also set a debt-free goal and track monthly progress within the app. A convenient debt payoff sliding scale lets you see the impact of increasing your monthly credit card payments.
The introduction of goal setting to Tally is similar to other personal finance apps like Mint and Cleo. If you need goal tracking as part of your debt repayment plan, this new Tally feature is excellent news.
4. Late Fee Protection
With Tally Pay, you can have peace of mind that you won’t miss payments on your cards and suffer late fees. If you prefer to pay some or all of your cards yourself, Tally still sends helpful reminders to make payments several days before your due dates.
Avoiding late fees helps accelerate becoming debt free, so it’s nice to automate the payment process or get helpful reminders from Tally.
5. Extendable Line of Credit
If you’re in good standing with Tally, they extend your line of credit to make minimum payments even if you’ve used your entire credit line. Plus, this extension gets added on to your next monthly payment, so you never have more than one Tally bill to worry about.
This is another safety net Tally puts in place to help you succeed. If you’re on a tight budget and need some help for the month, Tally has you covered.
How to Use Tally
If you want to consolidate your credit card debt with Tally, the process is quite simple. However, Tally has several requirements to protect itself from extending a line of credit to a high-risk borrower.
Step 1: Secure A Line of Credit
You need a FICO Score of 660 or higher to qualify for Tally’s line of credit. In other words, this means you need a good credit score or will have to rebuild your credit score for Tally to approve you. Tally runs a soft credit inquiry, so your credit score isn’t impacted if you apply.
Tally is currently available in 31 states, so geography is another requirement to keep in mind. Tally’s algorithm also analyzes your debt profile and history to determine your risk. Frequent late payments, total debt, income level, and other factors influence whether you secure a line of credit.
Tally doesn’t have an annual fee, and it’s ultimately the APR on your line of credit that matters. Depending on your credit history, the APR for your Tally credit line is between 7.9% and 25.9% per year. To make money, Tally charges you interest on the amount of money you end up borrowing from them.
Ideally, Tally’s APR is lower than most or all of your credit card debt, so you can use the money you save to start paying off your debt and pay less in the long run.
Step 2: Pay Your Credit Cards
Once you secure a line of credit and register your credit cards within the app, Tally monitors your balances, APRs, and payment due dates. Tally then ensures you never miss a payment. Plus, Tally calculates the best way for you to minimize interest payments by optimizing which cards you pay off first. Cards with a lower APRs receive minimum payments so you can focus more money on your high-interest balances.
Tally pays your cards at least two business days before due dates to ensure you don’t incur a late penalty. You have two options for paying off your credit cards:
- Tally Pay. Tally works by paying your cards every month using your credit line. You only get one bill for all your credit card payments and pay Tally back once per month.
- You Pay. This option lets you manage payments to your own cards and prevents Tally from spending your line of credit. Tally sends reminders to pay before your due dates, and you can pay off your cards through the app.
Tally lets you choose a payment setting for individual cards. Tally Pay is ideal if you struggle to consistently pay off your credit cards. If you don’t want Tally to pay off a certain card, switch it to You Pay and uncheck the late protection option. Tally still sends payment reminders but won’t put your line of credit to use.
Currently, Tally supports many major credit cards from issuers like American Express, Chase, Capital One, Discover, and Wells Fargo. Store credit cards to companies like Amazon, Best Buy, Home Depot, and Macy’s also work.
It’s worth noting that if you use your entire credit line, Tally still helps pay your bills for the month as long as you’re in good standing on your payments. Tally advances enough money to at least pay the minimum amount on each card and doesn’t charge over-limit fees.You pay advances back on your next due date, and this is an incredible feature that helps support you if you fall behind on your minimum payments for a month.
Step 3: Pay Tally
Tally is a debt payoff tool, not a free line of credit. This means that to benefit from debt consolidation and a lower interest rate, you need to keep up your end of the bargain.
Tally emails you a monthly statement with how much you owe. You pay directly through the Tally app with a linked checking account. Payments are due by 5pm PST on the due date. Your first statement arrives approximately one month after activating your account.
There are three factors that determine your minimum payment:
- Tally’s Spending. You repay the minimum payments Tally made to your credit cards for the month.
- Interest. Your APR varies based on your line of credit.
- Tally’s Loan. You repay 1% of the total amount you borrowed from Tally to keep you on track with paying off your debt.
Your minimum payment is at least $25 unless your balance is lower. However, you can always make larger payments to accelerate paying off your debt.
Tally uses the daily balance method to calculate your interest charges. This method considers your daily APR on each day-ending balance for unique daily interest charges. Tally combines these payments for your monthly total to get the total interest charge for your statement. Tally doesn’t compound interest daily, so you only pay interest on money you borrow.
If you can’t pay your bills, Tally will stop paying off your cards. If you fall behind, contact Tally support to work out payment issues and to inform them if you can’t make a payment.
Step 4: Save Money
Tally saves money initially by ensuring you don’t miss payments. If you secure a lower APR than most of your credit cards, you also save money on interest charges. However, Tally’s true strength is that it helps optimize how you pay off your credit card balances.
To do this, Tally determines which credit cards to pay first, considering factors like APR and card utilization. Cards with lower APRs than your Tally credit line only get minimum payments so high-interest debt is the priority. This is the debt avalanche method, and it’s one of the best ways to pay off debt because it saves money on interest charges in the long run.
Saving money on interest and not missing payments are the main advantages to using Tally. Additionally, there are several other benefits worth noting:
- No Fees. Tally only makes money on your interest payments, which are ideally lower than most or all of your credit card payments. It’s a win-win scenario. Loan origination fees and monthly membership costs aren’t there to detract from your debt-free mission.
- No Daily Compound Interest. Many credit cards compound daily interest. In contrast, although Tally uses the daily balance method to calculate interest charges, you only pay interest on the money you borrow. This lets you focus on paying off your principal balance and the minimum 1% of your Tally line of credit per month.
- Soft Credit Pull. If you’re worried about impacting your credit score with debt consolidation, Tally’s soft credit pull is great news. You can apply for a Tally line of credit without any risk, even if you’re turned down.
- Flexibility. Tally’s revolving line of credit means that, if you’re in good standing, you can usually secure additional money to pay your minimum credit card balances if you fall slightly behind on paying back Tally. As long as you’re in good standing and contact Tally preemptively, they’re usually willing to create a repayment plan that benefits both parties.
Despite a lack of fees and helpful automation, there are downsides to using Tally:
- APR Considerations.Your Tally APR varies based on your credit score, debt profile, and a variety of other factors. If Tally’s APR isn’t significantly lower than most of your existing debt, this app loses its purpose. Additionally, you might find more competitive debt consolidation loans that will save even more. You should also consider a 0% balance transfer credit card if you can responsibly pay off your high-interest debt and stay on top of payments.
- Credit Score Requirement. Unfortunately, Tally can’t help anyone with a credit score that’s lower than 660. If you’re working on improving your credit score, keep Tally in mind for the future. Until then, focus on debt-free strategies like Dave Ramsey’s seven “Baby Steps” to build the foundation for becoming debt free.
- Debt Avalanche Isn’t For Everyone. The debt avalanche method is mathematically efficient. However, becoming debt free is often a mental game as well because the journey can take years. For many, the debt snowball method, which involves paying off your smallest debts first, is superior. This is because you see a reduction in your debt amounts much faster than with the debt avalanche method, providing motivation to continue.
- Doesn’t Fix Bad Spending Habits. Tally Advisor encourages you to set aggressive debt-free goals and to stay on track with payments. However, this app doesn’t work if you don’t stop overspending. Learning how to make a budget is critical because Tally is just a tool to pay off debt. It might be tempting to spend more with your credit cards if you secure a lower APR through Tally, but this defeats the entire goal of becoming debt free. Ultimately, Tally is not a useful service if you can’t get the basics of budgeting down.
Debt isn’t always bad. In fact, without debt, many people would struggle to buy their first home, purchase a vehicle, and advance their education by going to college.
However, credit card debt isn’t good debt. It prevents building wealth, limits financial and personal opportunities, and can even have negative health effects. Ultimately, it doesn’t matter if your credit card debt was unavoidable or if it’s the result of a shopping addiction; it’s getting back on track that’s important.
Thankfully, Tally helps you save money and work consistently to become debt free. There’s no risk in applying for a Tally line of credit, and if you have a significant amount of high-interest credit card debt, Tally might be your best option to efficiently pay off your credit cards.
Don’t be afraid to shop around to see what other options are out there. However, if you can secure a lower APR through Tally, the app is an excellent way to start a new chapter in your life and to wipe out debt for good.
If you have a good credit score and want to consolidate high-interest credit card debt that you’re struggling to pay off, Tally is worth applying to. This app helps streamline debt payments, and if you secure a competitive APR, the savings can be considerable over the course of your debt payoff journey. Plus, Tally’s late fee protection and simple payment structure largely take the work off your plate.
If you don’t have that much high-interest debt, Tally isn’t as useful. Ultimately, you should still shop around for private debt consolidation loans and consider a 0% balance transfer card to find the most affordable solution.
Tally helps people with good credit scores consolidate high-interest credit card debt to save money in the long run. As long as you qualify and are responsible in making your payments, Tally can help you pay off your debt faster, provided you get a lower APR.