App Tally offers a unique approach to debt consolidation – making your credit card payments for you to reduce your interest and save you money. While the service has potential, it may not be right for every kind of cardholder.
If you are one of many Americans struggling with credit card debt, there are plenty of great strategies designed to get you out of it. From balance transfer credit cards to consolidation loans, there is no shortage of solutions to reduce your balances.
See related: How to pay off credit card debt: 3 best strategies
One unique service is trying to appeal to those with multiple credit card payments every month. Tally offers to consolidate your card payments and help you pay down your debt faster – all for less interest than you currently pay.
Read on to learn more about the service and if it is best for you.
What is Tally?
Tally is a mobile app available on both the Apple App store and Google Play store. It is designed to manage credit card debt and help its users pay down their balance faster.
Tally users link their credit cards, and the service automatically makes payments, using an algorithm to determine what size payments to make to each card – using factors like highest APR. In order to consolidate your debt, Tally will extend you a single line of credit to cover the payments it makes. That way, you just make one monthly payment to Tally and it takes care of the rest for you.
Right now, Tally is only available in certain states. Eligible locations include Arizona, Arkansas, California, Colorado, Connecticut, Washington, D.C., Florida, Georgia, Illinois, Idaho, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Mexico, New Jersey, New York, Ohio, Oregon, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington and Wisconsin.
How does Tally work?
Tally offers a few different solutions for its users, based on how you want to pay down your debt. The most common service is known as Tally Pays – and puts your repayment in the hands of the app.
Tally Pays is the heart of Tally debt management solutions. With this service, Tally will extend you a line of credit, based on a soft pull of your credit report. You’ll be offered a variable APR between 7.9% and 25.9% (accurate as of January 2021).
Once you’ve secured a line of credit, you can link your credit card accounts and let Tally start making payments for you. The app will automatically make payments based on its algorithm to try to save you as much on interest as possible and pay down your debt quickly.
Tally only makes payments to credit cards on your behalf if it can save you money on interest. That means if you have any cards with a lower interest rate than your Tally line of credit, the service won’t make payments on those cards. (Note: Tally always makes the minimum payment on your card. Read more on late fee protection later.)
Once per month, Tally will bill you the full amount of all the payments it has made, which you’ll pay against the Tally line of credit. Just like with a credit card, your Tally bill will have a minimum payment, calculated as follows:
|Tally minimum payment calculation
|Minimum payments across all linked credit card accounts + the interest you owe Tally + 1% of the total amount borrowed = Tally minimum payment
You can pay off the rest of the balance you owe Tally month to month, but keep in mind you will always be charged interest for using Tally. Additionally, by keeping a balance on your credit line from Tally, you limit the payments they can make against your credit cards – keeping yourself in debt longer.
With Tally Pays, Tally takes an aggressive approach to paying down your debt. Whenever possible, the app will make payments all the way up to the full amount of your credit line. So the more proactive you are about paying down your Tally balance, the faster you’ll pay off your total credit card debt. Plus, since Tally guarantees a lower interest rate than your credit cards, you’ll be saving money along the way.
A less appealing service than Tally Pays, You Pay is another tool offered by the Tally app. With You Pay, the user is still responsible for making their own credit card payments – but they can use Tally as an intermediary to make all payments through one app.
If you always pay your card balance in full to avoid interest, then Tally won’t be able to save you money. The app is best suited for those who carry a balance month to month – especially those with a large debt to pay off.
But for those who might make use of Tally’s services in the future, you can still link all your card accounts to manage through the app in the meantime. Tally will send you notifications prior to each of your cards’ due dates, and you’ll make each individual payment. If you prefer, you can even pay with the account linked to your Tally app, right through the platform. Otherwise, pay on your issuer’s site as normal.
Late fee protection
Late fee protection is integrated into both Tally Pays and You Pay options, and it is built to ensure you never miss a payment on a card linked to the app.
For any connected cards, Tally will always make minimum payments – drawing from your credit line. In this case, you might still get a monthly bill from Tally, even if you are set to You Pay.
Tally vs. a balance transfer
For many cardholders, Tally can be a great way to consolidate payments and get out of debt faster. However, it might not always be the best option. Many credit card holders might prefer to opt for a balance transfer to a card with a 0% introductory APR. Here’s a quick look at the differences between the two options.
- Soft pull to your credit
- Makes card payments for you based on payoff strategy designed by algorithm
- Your credit line only has to cover payments, not your entire balance across cards
- Only pays off cards if Tally interest is lower than your card’s rate
- Always pay interest on your Tally payments
- Need good credit to qualify
- Hard pull from credit card application
- You have to take responsibility for making payments
- You can get an extended period with no interest
- Credit limit might not cover entire balance (you could still have to make multiple payments)
- Most require good to excellent credit (above 670) to qualify
- Usually comes with a fee of 3% to 5%
In a nutshell, the benefits of Tally include keeping all your payments together. Even if you don’t have a credit line that covers your entire debt, you can still consolidate all your minimum payments under one service. Plus, you can do so without a hard pull to your credit.
On the flip side, a balance transfer offer might save you more in the long run. Since you always pay interest with Tally, an introductory APR on a balance transfer card can save you on that amount. Just keep in mind you’ll have to qualify for a high enough credit limit to transfer your whole credit card balance.
In the end, deciding which of these options is best for you comes down to two factors.
- How much work do you want to put into making card payments? Tally takes that responsibility off the user. Balance transfer cards require you to be proactive.
- How much can Tally save you on interest? Though your Tally APR might be lower than your card’s APR, you should make sure it is saving you enough to choose the service. An intro rate on a balance transfer card can be a better deal.
Is Tally worth it?
Tally certainly comes with plenty of benefits, saving you on interest and consolidating all your card payments into one monthly bill. But it might not offer the most cost-efficient way to pay down your debt, as balance transfer credit cards typically come with an interest-free introductory period.
Nevertheless, Tally can be a beneficial service for many cardholders – especially if you want to take some of the planning out of your debt payoff strategy.