How to Use FinTech to Delete Your Bad Debt, Faster
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The average American holds 5 financial accounts across just as many institutions. Gone are the days when people dealt with just 1 bank.
While having access to multiple providers gives consumers the best chances for scoring the best rates, it simultaneously makes it more difficult to optimize their debt schedule.
When you are dealing with 5+ platforms, it can be difficult to get the timing right on payments.
Here’s how you can take advantage of financial technology to optimize your accounts and delete “bad debt”, faster:
What is Bad Debt?
First, it’s important to recognize bad debt from good debt. Now, there’s a debate on what APR constitutes “bad debt”. Is it debt with an interest above 5 - 8 - 10%?
The truth is bad debt is any debt that grows at a rate that outpaces the debtor’s ability to pay.
What is Payment Optimization?
Payment optimization means that you schedule your debt payments in a way that maximizes your cash flow while prioritizing the bad debt to pay down first.
But you don’t have to figure this out on your own. There are two companies on the market that use AI (Artificial Intelligence) to do the heavy lifting for you:
Bright: The company has built a “MoneyScience” system that studies your finances. The system researches each user’s individual spending habits and evaluates the fastest, smartest ways to meet their individual goals. Learn more about Bright.
Tally: The company touts that their users get out of debt up to 2 times faster by using their app. Users with a credit score of 580 or higher may be eligible to access Tally’s lower-interest credit line, which is then used to pay down high-interest credit cards. Learn more about Tally.
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