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Could credit cards become your financial nemesis?

Getting stuck in a debt trap could significantly delay your financial aspirations.

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  • The average credit card debt in US households is above $5,000
  • Estimates show that nearly half of US adults don't save enough after monthly bills and regular spending
  • Exorbitant interest rates could stretch your debt for years
  • You lose much more money than you originally borrowed

Credit cards are an easy way to get access to credit for shopping, paying bills, or other purposes. In turn, you are required to pay at least the monthly minimum payment every month.

Although credit cards could be a handy source of credit in times of need, their interest rates usually range north of 20 percent. Unwise usage could therefore lead to a lot of financial stress. So, if you are only paying the monthly minimums on thousands of dollars of debt, chances are you’ll get stuck in a debt trap that could last for years. 

As the wrath of the pandemic continues to disrupt the normal functioning of society, paying monthly minimum payments along with the risks for another global economic lockdown could make it difficult for many households to save any money at all. 

Credit card balances have been rising by billions of dollars every quarter, whereas the average household debt was over $5,500. With a tightening monthly budget for many, the chances of relying on credit for regular spending, missing payment deadlines, and inviting negative impact on your credit score increase significantly.

A negative credit entry could stay on your credit report for years, and late fee payments could make it more difficult to manage your monthly budget. Add to that the fact that many Americans usually don’t have enough left after paying their monthly bills to save for retirement or an emergency fund.

How Artificial Intelligence Could Help You With High-Interest Credit Card Payments

An AI-powered app called Tally offers a low-interest line of credit to those with a credit score of 660 and above. If you opt for it, the app will transfer all of your credit balances to your new line of credit starting at a 7.9 percent interest rate. Every month, Tally will pay your creditors on your behalf and you will only have to pay Tally a single payment at a low-interest rate. This way, you will immediately start saving on high-interest payments. 

Furthermore, Tally’s AI bots analyze your credit card when you link them to their 256-bit encrypted platform and curate a personalized debt repayment plan with a projected debt-free date if you make the recommended monthly payments. 

In case you are not able to make your credit card payment within the deadline, Tally will automatically do so on your behalf so you won’t be subjected to high late payments fees or negative credit impact. You may choose to keep Tally’s low-interest revolving line of credit for further use even after your debt repayment without worries of late payments fees or any impact on your credit score.