It’s in the air: People are distrustful of banks. From younger millennials who came of age during 2008’s financial crisis to those who are a bit older who graduated from college only to find that jobs were scarce to baby boomers edging towards retirement with not enough saved it’s not hard to see why.
To put it into perspective, less than half of the public doesn’t trust banks according to this year’s annual survey by public relations firm Edelman.
The flip side, of course, is that people are dealing with tough financial stuff from student debt to unprecedented amounts of credit card debt. There are lot of people who need help out there.
That’s why Tally has entered the market, looking to actually tackle some of the big issues consumers are facing. It’s the world’s first automated debt manager, which is helping its users manage their debt payments and pay down their balances faster.
We chatted with Bethy Hardeman, Tally’s Personal Financial Expert about America’s debt crisis and how Tally is doing things differently.
The Money Manual: Why are people increasingly looking to startups to help them get out of debt (along with their other financial needs)?
Bethy Hardeman, Tally: Our research shows that the vast majority of people who did debt consolidation or a balance transfer are in the same position or even worse off than they were three years ago. Average credit card debt increased by 30 percent and people were more stressed than they were before.
TMM: What makes Tally different from what else is out there?
BH: Unlike debt consolidation, Tally isn’t a quick fix that perpetuates the cycle of debt. We continue to have your back beyond the consolidation of your accounts, and we proactively help you to pay down your debt smarter and faster.
Tally also separates the burden of credit cards from the benefits. We don’t settle or close your credit cards. You can continue to use them for their convenience and rewards without the stress of managing payments or accruing late fees and other penalties. By providing a smart, stress free solution, Tally encourages healthy usage of credit, which helps to build sustainable spending habits.
TMM: With consumer debt at an all time high, what’s your hope for Tally’s impact?
BH: The traditional solutions for managing and paying down debt are not working. Today, nearly half of U.S. households carry the record-high $1 trillion in credit card debt — the most widespread financial issue in the country. A recent Tally study shows people with credit card debt have the same levels of anxiety as those awaiting medical test results.
Our mission is to help people overcome credit card debt, as well as the anxiety that comes with it, by putting the burden completely on the shoulders of our technology. It’s still early, but we’re seeing that, on average, Tally users are on track to pay down their debt ten years faster than they would have on their own.
While we’re starting with credit cards, our long-term vision is to automate everything related to your finances. In less than a year, we’ve already saved people millions of dollars in interest and late fees, and we have the potential to save them billions more.
TMM: There seems to be a lot of distrust from consumers towards conventional banks. Is that something you are hearing from your users?
BH: What we’ve seen people respond to is whatever effectively gets them out of debt as quickly as possible. It’s our experience that consumers are becoming more and more open in embracing creative financial approaches that accomplish effective debt relief for them in an easy, simple way.
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