- Your credit card debt repayment plan should focus on high-interest credit cards with larger balances
- Explore avenues to lower your effective credit card interest rate
- Avoid steep late payment fees and negative credit impact with the help of automation
The average American household owns multiple credit cards with over $5,000 in outstanding debt. While access to credit could prove to be a lifesaver when you need money right away, racking up a high-interest debt could turn into an expensive and time-consuming debt repayment journey.
Extremely high interest rates north of 20 percent could lead to a vicious cycle of debt that lasts for years, especially if you are only able to pay the monthly minimums. In the process, you could end up paying much more than you borrowed, most as interest payments.
Being deep in credit card debt could cripple you from saving money for emergency funds and retirement investments. Additionally, millennials are often bogged down by student loans and credit card debt, especially in their early working years.
So, what should you do?
The integration of AI and machine learning in today’s finance apps has provided a way to reduce your effective interest rates on credit cards along with detailed financial insights on how to prioritize credit cards with higher balances and interest rates.
One app called Tally is specifically designed to help you avoid high interest rates and late payment fees. Here’s how it works:
- Sign up for free and link your credit cards through their 256-bit encrypted platform.
- Tally’s AI bots will then create a debt repayment plan with a projected debt-free date based on recommended monthly payments.
If you have a credit score of 660 or above, Tally offers you a low-interest line of credit starting at 7.9 percent. Upon acceptance, Tally will pay your creditors using your new line of credit every month, while you make a single payment to Tally and save money on interest payments. Essentially, it is like converting all your credit cards into one that is subject to a low-interest rate.
The Late Fees Protection program ensures that you never miss payment deadlines since Tally will automatically make the monthly payments on your behalf when you are unable to. This will protect you from steep late payment fees and the associated negative credit impacts.
Based on Tally’s estimate, users with a Tally line of credit save thousands of dollars in interest payments over years.