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The Transfer Trap: Tally study explores credit card debt refinancing

Tally found credit card balance transfers and consolidation loans fall short because they don't change consumer behavior or awareness.


June 21, 2017

SAN FRANCISCO — Tally, the app that helps pay and organize your credit cards, today released the results of its Transfer Trap study that takes a closer look at the most frequently cited solutions for consumers trying to manage credit card debt: balance transfers and debt consolidation loans, both known as credit card debt refinancing.

The study found that an overwhelming majority of consumers who tried these solutions found themselves financially and emotionally in a similar or worse-off position than they were three years ago.

Tally surveyed more than 1,700 people in the U.S. who have had credit card debt at some point in the last three years. The findings go on to demonstrate that these solutions — balance transfers and consolidation loans — do not work, because they don’t take any steps to change behavior or awareness.

Key findings from the Transfer Trap study:

• 70% of individuals who refinanced their credit card debt are in the same or worse position as they were three years ago.

• The average credit card debt among these individuals increased from $5,606 to $8,117 over the past three years.

• Only 38% of individuals who balance transferred say they are able to pay off the entire amount before the promotional rate expires.

• 81% of survey respondents said they felt that debt refinancing actually makes it easier to accumulate more credit card debt.

• 71% of survey respondents said debt refinancing made them more stressed.

“There is more than $1 trillion of consumer credit card debt in the U.S., and the Consumer Financial Protection Bureau calls credit cards the largest and most complex market of any financial product. It’s no surprise that consumers find managing their credit cards as stressful as awaiting major medical test results or surgery,” said Jason Brown, co-founder and CEO of Tally. “There is a wealth of content and education available from government agencies and fintech companies, however our Beta and research have demonstrated how well consumers respond to the automation that Tally is introducing for the first time.”

Tally’s goal is to automate consumers’ financial lives, beginning with credit cards. Tally handles every permutation of users’ credit profiles, balances, cards, promotional rates and behavior, with advanced algorithms that help consumers make the best possible financial decision, ultimately maximizing their savings and protecting them from credit card interest costs and fees.

About Tally

Tally is an app that helps people overcome credit card debt. Founded in 2015, it is the first automated debt manager. Tally helps save its users money and time by determining the smartest and fastest way to pay down their debt, then takes action on their behalf.

Tally helps separate the burden of credit cards from the benefits, enabling people to use credit cards for their convenience and rewards without the stress of managing multiple payments or accruing unnecessary fees. Tally’s vision is to automate consumers’ whole financial lives, starting with America’s $1 trillion credit card debt.

Sign up for Tally for by downloading the app on iOS or Android.