Many people carry credit balances across multiple cards. The best general strategy to allocate a given amount towards monthly payments is to make the minimum payments on each card and then allocate the remainder to the card with the highest interest rates. Multiple studies have shown, however, that people do not do this, but instead follow simple heuristic such as dividing payments in proportion to each card's balance. This suggests that a FinTech startup could offer a service of managing payments in an optimal way. It could incorporate more complex concerns like not maxing out certain cards, being smart about card-specific rewards/changes, and managing a family portfolio. Also, consumers have high levels of anxiety about debt so a comforting intermediary might be preferred.
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