A simple way to pay off your most expensive credit card debt

A new smartphone app launching this week claims it can help you be smarter about managing your credit card debt. Here’s what you should know about it.

How it works

After scanning a picture of all your plastic, Tally performs a credit check. If you’re approved, the service helps you pay off your high-interest cards using a new line of credit with a lower rate. Simply pay Tally once a month and they say they’ll take care of the rest. (You can still log into your issuers’ site to check rewards, for instance.)

Tally — founded by Jason Brown and Jasper Platz, with capital backing from Shasta Ventures and Cowboy Ventures — offers credit lines to customers with at least a 660 FICO credit score. However, you’ll need one a lot higher to receive its best annual percentage rate, which is 7.9%. (Currently, the highest rate is 19.9%.)

“A Tally line of credit operates just like a credit limit on a card,” Brown, who serves as Tally’s CEO, said. You can use whatever card you want, and “it always does mathematically what’s best for you” using a complex algorithm. “It takes out all the hassle and anxiety of managing credit cards.”

Weighing the pros & cons

Regardless of how many cards you store on Tally, the service requires one monthly payment to cover all of the minimum payments on your cards, plus new charges and any lingering Tally debt. You can pay as much on top of that as you want, which will go toward your highest debt, and there are no balance-transfer, annual, prepayment, late or insufficient funds fees, Brown said.

Tally stresses in its user agreement that customers are responsible for syncing their credit cards to the app correctly and updating any account information as necessary. Brown said if a card issuer was breached, Tally would still make your card payments, but it is the user’s responsibility to remember to pay Tally. The service says on its website that it takes “steps to ensure that your information is treated securely and in accordance with [its privacy] policy”, which you can read in full online.

Tally will also suspend payments and withdraw a line of credit after two months of missed or returned payments, Brown said. It will send emails, phone calls and push notifications, but not everyone might pay attention.

Keep in mind, too, there are personal loans that can offer lower interest rates and plenty of credit cards out there with 0% balance transfers that you may be able to qualify for, depending on your credit score. This is one reason Tally may not appeal to everyone, particularly those who don’t like banking online.

Read more: 7 ways to cut your monthly bills

Paying down credit card debt

It’s important to read the terms and conditions associated with any financing you are considering (whether new or old school) in order to determine if a particular credit line is right for you.

Whether or not you decide to try Tally, it’s important to keep your credit card debt low and make sure to pay your card bills on time. You don’t want to put it off — doing so could hamper your credit score and cost you serious cash down the line. Also, aim to keep track of how your habits are impacting your credit score. You can do so by viewing your free scores, updated monthly, on Credit.com.