An overwhelming majority of consumers who tried balance-transfer credit cards and credit card debt consolidation loans, both known as credit card debt refinancing, found themselves financially and emotionally in a similar or worse-off position than they were three years ago.
The Tally app’s Transfer Trap study found • 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.
About 81% of survey respondents said they felt that debt refinancing actually makes it easier to accumulate more credit card debt. Nearly 71% of survey respondents said debt in 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.
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.