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As a personal finance writer and editor, I spend pretty much all day thinking about money — and I often need to research new apps and services. For me, the biggest questions are always: Would I feel safe using this? And are there potential negative consequences (for me or anyone else) as a result of using this?
To help you make decisions about money apps or other services, I wanted to share my process. Here's how I decide if a financial service, product, or app is something I'd feel good about using and recommending:
1.First things first, I go to the company's website and look for a contact phone number.
2.Then, I look around for signs that the website is legit.
3.Next, I'm looking at pricing, which raises different issues depending on the service:
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For a bank , that means fees. If I see monthly account fees or minimum balance fees, that's a no-go. I'm also very anti-overdraft fees. For US-based banks, I make sure they're FDIC-insured. This means that my deposits will be protected in case the bank fails. If you're outside the US, this list of deposit insurers can show you what to look for in a bank near you.
For budgeting tools , I strongly prefer free apps like Mint, though some subscription products offer robust tools that I would recommend to someone who wants to go really in depth with their budget. But generally, it doesn't make a lot of sense to me to spend money on budgeting when it can be done for free.
For credit cards , first I'm checking to see if there's an annual fee. I know in some situations, it can be worth it to pay an annual fee. But in general, I'm not a fan so I steer clear. I also look at the range of interest rates (aka APRs) for the card. Credit card interest can be a real budget-killer, so I like to see ranges that start in the low teens and are mostly below 20%. It's also helpful to scope out any introductory offers, like a 0% interest period or bonus cash back or points.
For credit monitoring or credit building , I stick to free services because you can already access your credit reports for free once a year. When I look at these services, I really like to see strong educational materials that accurately teach users how to navigate the confusing world of credit. Finally, I look at how aggressively the site tries to sell users on credit card and personal loan offers. I don't mind seeing suggestions for cards I'm likely to qualify for, but if I see anything like, "Open credit card X to add Y points to your score," that's a) probably way too oversimplified, b) definitely too pushy, and c) 100% a red flag to me.
For investing , I'm looking at trading fees, account minimums, and any ongoing account-related fees. I like to see minimal to zero fees, and I especially like accounts with no minimums that allow you to start investing with just a dollar.
For everything else , I look for the cost and weigh it against the benefits. I ask myself, is this something that I can do or get for free? How much is this service worth to me? If it's free, what kinds of data are they getting from their users in return? Is that something I'm OK with? For example, I use a few shopping rewards apps. I know they gather data about me, and I'm OK with it — but I'm aware that others might not be. So when I cover those apps, I like to call that out so people can make their own decisions for their comfort.
4.If my spidey-sense starts to tell me that something seems off, I'll google things like "[company name] scam" and "is [company name] legit?"
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One of the most common red flags that sends me down a Google rabbit hole is sadly if the service is being heavily marketed to lower-income people or people with lower credit scores. Because traditional financial services often exclude these groups, sometimes the companies that do serve them can be pretty predatory (think payday loans) or even scammy. I'll also search this if something sounds a little too good to be true, if there's too little information on the website, or if the service seems overly confusing.
5.Next, I read professional third-party reviews to get a better sense of what the company actually does.
6.If they have an app, I read a range of user reviews in the app store to look for common issues. If lots of reviews mention poor customer service, I won't use it.
7.Finally, I'll go to Reddit and search for threads about the company.
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I like to search in r/PersonalFinance in particular because many of the users there seem well informed, and the conversations are generally really helpful. Also, some companies have their own subreddits where users can talk about the product and even communicate with employees.
I often find Reddit threads comparing a handful of apps that do roughly the same thing, and it's really interesting to see what different people like and don't like in similar services. Sometimes looking up one company on Reddit leads me to a post where I learn about a similar but better option. Other times, my Reddit dives turn up customer service issues or other unexpected problems. Either way, I usually learn something new when I dig into the Reddit posts about a company.
And there you have it. Once I've gone through these steps, I usually have a good idea of whether a financial service is trustworthy, useful, legitimate, and worth the cost. It might look like a lot of work, but I can usually do this research in about 30 minutes. Oh, and because I'm a gigantic nerd, I actually find this whole process kinda fun.
What do you look at when you're thinking about signing up for a financial service or downloading a money app? Share your tips in the comments!
And for more stories about life and money, check out the rest of our personal finance posts.
Source : https://news.yahoo.com/personal-finance-writer-heres-vet-021603759.html1949