Is Opening A New Credit Card The Solution To Your Credit Card Debt Problems?
Credit cards can make your financial situation worse, but if you use them strategically, they can also make your financial situation better. For example, opening a credit card, but only using it to make small purchases can increase your credit to debt ratio, thereby improving your credit score, especially if you pay off your balance in full each month. It is possible to get free stuff from credit card reward points, but unless you are extraordinarily disciplined, you will most likely spend more money than you save. Credit card debt is a leading reason that people need to consolidate their debts in order to avoid defaulting on their existing debt obligations. A recently debuted debt consolidation product looks suspiciously like just another credit card. To find out more about your options for debt consolidation, contact a Plantation debt consolidation lawyer.
How Is Tally Different From Other Debt Consolidation Options?
Debt consolidation is when you take out a personal loan with a lower interest rate than your credit cards and you use it to pay off your credit card debt. These are the advantages of debt consolidation:
- Instead of multiple credit cards, each with its own due date, you have just one monthly payment, making it easier to avoid missed payments and the late fees that come with them
- You pay less interest, saving money in the long term
- Paying down the debt consolidation loan improves your credit score
Debt consolidation has its advantages, but you are still taking on more debt in order to pay your existing debts. Paying off a debt consolidation loan is a major accomplishment, though.
Tally is an app-based debt consolidation product. It offers interest rates as low as 7.9 percent, depending on your credit score. In most cases, you need a credit score of at least 580 to participate in Tally. What sets Tally apart from debt consolidation loans is that it is a revolving line of credit, making it similar to a credit card. If your credit score is good enough to get a Tally line of credit that can pay off your entire credit card balances, then Tally will erase your credit card debt all at once. This means that the ugly truth about most consumer financial products is also true about Tally, namely that the people that it can help the most are the ones who need it the least.
If your credit card debt problems are so severe that you cannot qualify for a Tally line of credit, debt consolidation might still be a good option for you. A Broward County debt lawyer can help you choose the best option among chapter 7 bankruptcy, chapter 13 bankruptcy, debt settlement, or debt consolidation.
Think Before You Borrow More Money
Debt consolidation can help you break the cycle of borrowing more and more money to keep up with your credit card bills and other installment payments, but it does not always have this effect. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.