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Think You Can Trust Credit Card Reviews? Think Again.

By Frugaling 10 Comments

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Advertising in New York City. Flickr photo by Pascal Subtil

These ads are everywhere!

The multinational, multibillion-dollar bank, JP Morgan & Chase, spent about $1.9 billion on advertising in 2013. That was down from a peak of $2.35 billion in 2011, but still one of the largest amounts by any bank. With that kind of money, you should be curious what they get in return.

Advertisements for companies like Chase, Citigroup, Barclays, and others are plastered over billboards, magazines, newspapers, and websites. You’ve likely passed by one of their ads today if you live in a modest size city. Heck, there could be one next to this article, due to the Google ads running on Frugaling!

That money is spent to attract new “customers” of credit. Their hope is to entice people with signup bonus offers, and keep them for life. After they click an ad, sign up online, and begin to swipe, the banks begin to profit. From credit card transaction fees to late payment fees to cash advance fees to interest rate fees, companies enjoy lucrative profits. For every new customer, banks trust they’ll make hundreds of dollars over the next few years – if not more.

Personal finance writers are easily influenced

Those advertising pressures and interests can trickle down. Websites that aim to address personal finance concerns and offer advice might succumb to the fire hose of potential profit available to them. With my hat in hand, I must admit I was one of them.

I made thousands of dollars in about 1.5 years by marketing credit cards. By placing links to select offers, I was able to make $50, $75, and even $150 per person who signed up. The affiliate money helped me radically change my life and pay off my debt. But as it helped me pay off my debt, I began to see how I had been duped.

In financially unsound and uncertain situations, people do things they’d rather not do. Frankly, society sometimes encourages us to put our heads down and work through the pain and ethical dilemmas – ignore your internal compass for the good of the company, profit, and revenue. I had become one of those people.

When reviews are really advertisements

Reviews aim to feature both the pros and cons of certain products. Readers want honest feedback and advice from authors, but they weren’t getting it. Visitors to my site were coming droves to see my “reviews.” But that’s not what they were really getting.

Unfortunately, moneyed interests in banking have a tremendous sway on the rating of products. Look through many websites that market credit and banking products, and you’ll begin to notice an overwhelming pattern of 4- and 5-star reviews – across the board. With this positivity, you’d expect credit cards to wash your dishes, clean your laundry, and chauffeur you to work.

How could any company’s product be rated this highly? There’s a reason for optimism and it all comes down to money. Those advertising dollars – billions from banks – trickle down to the simplest of bloggers, directly influence the content, favorability, and overall reviews.

Visitors who are interested in honest, open advice might be shocked to know that when they click that link to sign up, they are crediting that blogger hundreds of dollars in the process. Even more, that the entire review was fabricated to drive more clicks to the bank’s site. When I wrote these articles, I suppressed the negatives to encourage clicks. I was advertising products, and framing them as reviews.

Credit cards aren’t the devil, but they’re not for everyone

We live in a world where big banks spend billions to get at us. Their money travels onto TV, print, and diverse digital media. Eventually, it even lands into the pockets of personal finance websites. That’s when the magical influence occurs, and people end up following the manipulated “advice” of trusted sources.

With revenue pouring over the Internet from companies, my real advice is simple: be skeptical. My hope is that no one gets tricked into thinking that a writer completely – and out of his or her own volition and without profit motive – decides to write a credit card review.

Here are 9 important questions you should ask yourself before following any credit card review:

  1. Do the reviews link directly to the bank’s sign up forms?
  2. Are there affiliate tags embedded in the links?
  3. What makes the writer optimistic about the company and card?
  4. Do they personally use all of these cards that they recommend?
  5. What income bracket is the reviewer in?
  6. What’s their credit score?
  7. What was their experience with customer service representatives?
  8. How long has the reviewer been providing advice?
  9. What makes them an expert in credit cards?
  10. How might incentives influence the quality of this review?

Credit cards aren’t the devil, and they don’t tend to be the sole contributor to debt. Usually, it’s a lifestyle of spending more than you can afford, with little income to pay the bills. That doesn’t mean excessive purchases at Burberry and Hermes; rather, that any amount over what you take in will lead to debt (groceries included). Credit cards just facilitate that process – faster – as the fees quickly compound.

When personal finance writers begin to weigh in, it’s vital that their advice be accurate, fair, and balanced. Unfortunately, it’s frequently manipulated by advertising revenue potential. I learned how the money could influence what I ultimately write, and I no longer want to lobby for an industry that sometimes preys off of people that genuinely need help. If you see a review article from me, it’s my hope to be as analytical as possible.

Filed Under: Social Justice Tagged With: ads, advertising, Banks, Barclays, Chase, Citigroup, credit, credit cards, dollars, Google, Marketing, money, Personal Finance, writers

What Won’t You Do For Money?

By Frugaling 11 Comments

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Manhattan Skyline
Photo: Geraint Rowland/Flickr

Hoping for a better life

As children, we’re often exposed to idealistic messages: work hard and become whatever you want. But possibilities change and reduce as we age. The responsibilities grow, and the window to become whatever you can dream up tends to dissipate.

It would be nice to champion what many popular businesspersons say about success and achievement. It would be nice to say that the world is your oyster, and you can do anything you can think up. Unfortunately, that would negate the very real circumstances that we all find ourselves in. We come from different races, ethnicities, socioeconomics, genders, and more. Life varies, as do the opportunities.

Most of us cannot drop everything — all our responsibilities — to fulfill dream vocations. Many are just working to pay the bills — to get by. Some are burdened by being single parents, persons with disabilities, and any number of things that pose greater challenges to “making it.”

Debt holds back those dreams further

My frugal journey started with many zeros in the opposite direction. I was in debt to the tune of nearly $40,000, and without an escape plan. I wanted to have a life of freedom to ponder my intrinsic interests and passions. I wanted the opportunity to find my dream job — regardless of income level.

Before I could pursue those future possibilities, I needed to make more income and pay off massive amounts of debt. My paychecks weren’t enough to pay off loans and survive in graduate school. The equation didn’t compute, and I was running a scary deficit.

The mountain of debt seemed unconquerable. Dreams of a pleasant future were held back, and replaced with terrifying sweats and nervous nights. Debt was closing doors in my life. I needed more money.

Desperate times, desperate measures?

From the very start of Frugaling, I received emails from individuals and organizations wanting to write articles for me. At first I was flattered by their offers — some even included payments! Swirling with pride and appreciation at being offered real money to simply publish articles, I contemplated their offers, but hesitated.

I soon learned that these were “sponsored article” or “paid guest post” emails. They increased in frequency and payment amounts as I continued to write and grow Frugaling. Over the course of nearly two years, I received thousands of dollars in guest posting opportunities, but never accepted them. The emails tended to be from predatory lenders and questionable corporations. They seemed eager to receive traffic from websites and to pull from others’ reputations.

That money could’ve taken me on a European vacation, if I accepted every offer that came my way. My debt would’ve been paid off faster, and investing started sooner. There’s just one catch, I would’ve sold out my entire audience — including you!

Recently, I received another email that stated I could receive about $500 to place a sponsored article on Frugaling. Again, I thought about what it meant if I shared it with you all. What I found was that it wasn’t worth it. What I do on this website is about more than just making me more money. Ironic, seeing as this personal finance site, isn’t it?

Finding limits and sticking to them

Most individuals don’t kill, lie, cheat, or steal to make money. Whether religiously informed or intrinsically motivated, these are ethical/moral limits that prevent people from acting on individual needs. They recognize — whether consciously or unconsciously — that hurting another for one’s own gain isn’t collectively advantageous. In other words, individual achievement should not trump collective successes.

Turning down hundreds of dollars for 500 to 700-word articles from shady organizations and individuals was a limit for me. Motivated by a fear of alienating you and misrepresenting my values, I decided against any of these offers — and will continue to.

Nonetheless, I’m left to wonder:

  • What won’t you do for money?
  • What are your limits?
  • Where do your ethics come from?
  • How do you find ways to financially better yourself and others?
  • When have you said “no” to money?

Filed Under: Make Money, Social Justice Tagged With: achievement, advertising, dollars, Finances, Greed, Income, money, Success, Wealth

Would You Pick Up A Penny? [Video]

By Frugaling 15 Comments

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Penny Picture
Photo: Dagny Mol/Flickr

“Find a penny, pick it up, and all the day you’ll have good luck.”

That’s what I grew up saying, and occasionally, I can’t help but pick up a penny. The penny — a dirty brown, copper coin — is the lowest denomination we own as Americans. With inflation, rising prices, and a changing, digital economy, the penny doesn’t seem to be necessary. It’s really more weight than it’s worth.

It’s an interesting question, though: What amount of money would you need to see to pick it up? Would you go for a penny? How about a nickel, dime, quarter? When does picking up some loose change seem like a reasonable use of time? For me, if I see a nickel or more, my rapacious little hands are quick to grab it.

I’m a man with nary a dime of net worth, finding a nickel feels like winning the lotto. Well, maybe I’m being a bit hyperbolic, but you get the picture. In my current economic state, the percentage that a nickel, dime, or quarter contains is worth my bending down to grab it. But it’s important to keep some perspective about wealth in the United States.

When you’re a billionaire like Bill Gates, reaching for that little coin may cost you more than it’s worth. Here’s the always amazing, talented, and funny, Neil deGrasse Tyson to explain:

Filed Under: Make Money Tagged With: billion, cents, change, coins, dollars, inequality, money, Neil deGrasse Tyson, pennies, penny, Wealth

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