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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

Frugal Articles of the Week

By Frugaling 1 Comment

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Reading Nook Photo

Every week I like to feature a few frugal articles that caught my eyes. Curl up in your favorite reading nook and enjoy. Hopefully these encourage you to live frugal lives!

Families Ditch Cars for Cargo Bikes by Laura Moser
The Hoverman family lives in a ritzy neighborhood with a luxury, Audi SUV. They have it all, seemingly. But one thing that sets them apart is that they avoid driving on the weekends. Instead, they opt for “cargo bikes,” which allow for the whole family to ride in comfort and still be eco-friendly. What a great idea!

Nearly a third of savers have less than $1,000 for retirement by Vaishali Gauba
The statistic might shock you: a significant minority has little to speak of for retirement. Of the total sample population for the survey, 57 percent had less than $25,000 saved. This absence of wealth could be exceptionally difficult for future comfort, livelihood. But beyond the basic stats, I must caution readers that the solution isn’t as simple as saving more. The problem is that people are not paid enough to save enough. Then, and only then, people can be better directed to plan for retirement. Their immediate needs must be met first.

The Three Rules of Self-Sufficiency and Preparedness by The Frugal Farmer
Laurie’s a prepper. She has been storing food and goods for whatever financial straits she might find. In this enlightened article, she addresses three types of self-sufficiency: physical, financial, and spiritual.

Google launches its own mobile network by Chris Welch
This is tremendous news for all cell phone subscribers. Google has entered the cell phone network market. Now, they’re doing more than just building the operating systems and contributing to hardware development. With Google’s Project Fi, users can switch seamlessly between providers (Sprint and T-Mobile) across the world. Wherever there’s wi-fi, the phone defaults there, and then pops up to cell towers when you leave that area. Plus, the phone will work internationally, too. The best part — the frugal part — is that the monthly fee is $20 plus $10 per GB of data. If you don’t use your entire allotment, you actually get paid back as credit!

To fight income inequality, tell your friends how much you make by Meredith Bennett-Smith
It might sound counterintuitive, but income inequality calls for drastic measures! Despite this being the 21st century, there’s great income inequality between races, genders, and social classes. One author is advocating that people of all stratums rise up and say how much they earn. The hope is that people will be able to get an accurate and fair assessment of what they should be paid.

Filed Under: Save Money Tagged With: articles, bike, Bikes, cell phone, Fi, Frugal, Google, Income, Income Inequality, Prepared, Retirement, Self-Sufficiency, week

Is Capitalism Compatible With Caring?

By Frugaling 6 Comments

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Google Campus Photo
Google is known for being one of the best places to work, with some of the happiest employees.

On the cost of caring

Each year, 217 million workdays are lost or less productive due to mental health concerns. Indirect mental health costs on companies are estimated at $59 billion. But some estimates put these costs as high as $80 to $100 billion. These staggering numbers often serve as motivators for human resources departments and corporations to take action and “solve” mental health crises.

For each specific diagnosis, the statistics vary widely. Researchers tend to look at indirect costs, direct health coverage costs, productivity disruptions, absenteeism, and failure to be mindful while on the job. One of the more common ones, depression, costs employers about $44 billion in lost productive time. Additionally, employees with depression miss about 4.8 days of work and 11.5 days of reduced productivity every 90 days.

Another frequent mental health concern in employees is anxiety. Symptoms of anxiety manifest in various ways, but generally are closely linked with stressors. Anxiety disorders cost about $42.3 billion in the 90s. Inevitably, that estimate would likely be far greater today.

The most expensive diagnosis is usually bipolar disorder. From absenteeism to lost productivity to medications, this disorder has a potent effect on profits. In fact, it costs about $6,836 per employee with bipolar disorder. Closely linked, suicide amounts to $34.6 billion in medical costs and work lost. And non-fatal suicide attempts cost $4.3 billion in lost wages and productivity.

Make companies care through stats

All of these statistics come from fairly reputable sources such as the Centers for Disease Control (CDC), National Institute of Mental Health (NIH/NIMH), National Alliance on Mental Health (NAMI), and peer-reviewed journal articles. As an academic, I trust that these organizations are estimating — to the best of their ability — the high price of mental health in America.

In the past, many companies discriminated against applicants with mental health concerns. Frequently, people were ruled out for jobs they would otherwise be qualified for because of mental illnesses. What the CDC, NAMI, and NIMH have worked tirelessly to do is normalize mental health concerns and reduce stigmas. They’ve worked to interject a hypothesis for companies, which is that everybody wins when you care for employees.

Each organization learned that to talk to companies you need to focus on the bottom line: profits. They’ve excelled at making terrific inroads with corporate giants that have instituted better fringe benefits, fun activities in the workplace, and greater time off. They know that companies want happy, healthy workers because that leads to greater sales, revenue, and shareholder returns. And, for the most part, it’s helped.

Treat the illness and profits will boom!

Mental health advocates in the corporate world seem to politely accept that companies are only motivated by numbers. They argue that untreated and undertreated mental concerns cost more than proper treatment.

Understanding this basic premise, companies have accepted a Mr-Fix-It-style psychology. Treat the illness, get better, and then get back to work! Similarly, healthcare companies rarely offer long-term mental health treatment, as it’s limited to short-term, brief therapy. To offer something more substantial would require companies to pay more profits to care for employees.

This pressure has led companies to ask researchers and academics to think of faster ways to treat distress. The question seems to be, How can we rapidly patch people up so that they can get back to work?

Models of treatment have focused on prescription pills and quick rounds of talk therapy to douse the fires. We’ve learned to cap emotional distress — to keep it in line with what corporate America needs.

Companies aren’t the victims, we are

Capitalism is predicated on a fatal flaw: work hard and be rewarded. Unfortunately, people are all born with different strengths and weaknesses, positions in society, and economic hand-me-downs. Working hard will look different for everyone. We are fundamentally created unequal, unlike the founding fathers suggested.

Men are generally taller than women, but that doesn’t mean they should get paid any different. Women live longer than men on average, but that doesn’t mean companies should begin to hire women because they could spend more years working. Our differences must be balanced out, because purely capitalistic forces fail to change the systemic problems.

And just like the aforementioned physicality and livelihood between genders, there’s great variety in mental health needs. People are not raised equally. Some parents are wonderful — others abusive. Some schools are the best in the country, and others are the worst. Some experience difficult traumas, and others seem to float by without incident. Our experiences from womb to tomb will vary greatly, and we need to learn to embrace this fact. Some people will need greater mental health care.

Flipping our understanding of mental health

Anything that gets in the way of working hard, being productive, and increasing revenue has — up until this point — been seen as an impediment. Being depressed has become a “bad” thing that you should avoid. Get that treated! It’s considered a flaw to suffer and hurt, because of the cost to a company’s bottom line. You’re causing profits to dip! Additionally, it’s encouraged people to stay tight-lipped and private about their struggles for fear of being ostracized.

When dollar signs flashed before corporations’ eyes, they listened. They understood that by making their employees healthier, they’d increase their bottom line. It would seem — for a moment — that capitalism was compatible with caring. But what if the money wasn’t there, would companies still care?

Companies desperately need to change the way they do business. Companies must see their employees as autonomous, capable, and creative humans. Companies must provide a space to excel, but also to seek freedom. Companies must look beyond the dollar amounts and pay for better time off and vacations. Companies must do their best to disregard the power of shareholders, in favor of respecting their employees.

Medical and mental health are in decline in America. Our system is bloated, expensive, and frankly, embarrassingly flaccid. It’s time we flip the paradigm. It’s time we say that workplaces need a reboot. It’s time for employers to receive the treatment. Perhaps it’s time to make companies work for us?

Filed Under: Social Justice Tagged With: America, Capitalism, care, Companies, employees, Finances, Google, illness, mental health, Psychology, statistics

Pay for privacy: Apple’s new marketing campaign against Google

By Frugaling 5 Comments

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On August 31st, news companies started reporting on a nasty, targeted attack on a variety of celebrities. Of no real fault of their own, these (mostly) female celebrities woke up to a shock: nude and intimate photos and videos, which were leaked onto the Internet. The “anonymous” hacker seemed to specifically target some of the famous celeb’s Apple iCloud information.

See, Apple has long been a terrible cloud provider. Their iCloud service has frequently suffered security leaks, downtime, and inexplicable bugginess. The beleaguered service hasn’t ever gained traction. Unfortunately, without the cloud, Apple’s future revenue might eventually suffer.

The release of private, celebrity photos came at a terrible time — just two weeks before the new iPhone 6 and Apple Watch keynote by Tim Cook. Apple’s taciturn answer: this is not the fault of iCloud servers or our security. Well, if it was that simple, we could pack our bags and move on from this perverted mess. And as a shareholder, I’d love to!

Reality is far murkier here. As it turns out, there were weaknesses in Apple’s iCloud security, which allowed hackers to penetrate into the “Find My iPhone” portion of the website, and repeatedly guess passwords without any restrictions. Through a brute force application (guess-and-checks tons of passwords over and over again until it gets a winner), the accounts were compromised, illegally downloaded, and provided access to a wealth of explicit photos. Likewise, this determined hacker and/or collective aimed for simple security questions, which were easily guessable for public icons like Jennifer Lawrence. This ultimately allowed for a massive leak of data. While Apple claimed innocence, they quickly rectified security gaps and patched problem areas. The hack was rendered inert; albeit, the damage was already done.

As media consumers, we seem to gravitate towards one scandal or story, and then quickly drift to the next — barely remembering what was important in the first place. This quick consumption of news seems to reduce the real importance of important stories. Frankly, it’s yet another consequence of the 24-hour news cycle — it’s literally endless. Apple is relying on us to rapidly forget the iCloud hacks of 2014.

It was a recipe for disaster, but now Apple is manipulating the message for public gain and increased profit. The genius is mind-bending, and it starts with the distinction between privacy and security. By definition, privacy is the right to be left alone. Simple as that. If you’d like to search for strange Christmas ornaments privately, the assumption is that you’re not tracked, nor should you be concerned about others chiming in on that search. Security, on the other hand, is about being free from danger or threat. From the mall cop to the password on your email account, security attempts to protect us from external threats.Privacy and security can be overlapping concepts, where security is necessary for privacy. Without security, privacy quickly disappears.

The point is, privacy and security are different, and Apple is purposively confusing the two. By hacking the iCloud accounts of various celebrities, this mercenary crew showed wicked flaws in Apple’s “secure” platform.

The evil brillance at Apple has been a prolonged offensive on Google’s data-mining business. Tim Cook has repeatedly spoken about the privacy and security embedded in Apple’s products, along with their commitment to respecting individuals’ rights. Each time Cook has mentioned their push for privacy, it’s come with a dig against Google. In the preceding video, Cook lambastes competitors for tracking users, while emphasizing Apple’s age-old push to “try not to collect data.”

Even in the recent keynote address, Apple executives emphasized the privacy features every step of the way. With the recent introduction of payments via Apple Pay (hold an iPhone in front of a receiver to pay), the company said they wouldn’t monitor transactions — that they were between you, the merchant, and credit card company. If you didn’t know better, you might assume that Apple is the most private company in the world.

Apple is clearly trying to quickly evade and rebrand themselves as the last privacy conscious mega-cap company in the country. And if people don’t pay attention, it just might work. If you are a consumer and you hear about individual hackers, corporate espionage, and governmental spies, you’ll want the most private hardware system you can find. Unfortunately, it’ll cost you and arm and a leg (around $1000 for the Macbook Air), and may not even be more secure than other platforms.

Take the Google Chromebook, for instance. This computer costs about $200 to $300 depending on the model you choose. The computer automatically updates to the latest operating system, protects you from viruses and malware, has a verified secure boot (which prevents internal changes from the operating system by outside hackers), and lasts about 10-12 hours on a single charge. These are considered one of the most secure systems on the market today. Chromebooks are perfect for most everything, and they’re a real threat to Apple’s business model. To save all that money, you sacrifice a bit of privacy to Google’s servers, but none of the security.

That’s the problem: Google and their Chromebook line is a threat. Apple has a moment to quickly switch the media spin cycle to full blast, argue that they’re a privacy-focused company, and get you to pay about $800 more on a laptop than necessary.

Apple Pay More For Privacy

We live in a world where privacy and security are threatened in a multitude of ways — not least of which by capitalistic disinformation. From private hackers to the NSA, security is being attacked. And as security goes, so does privacy. But privacy should be a right; in fact, it’s a part of the Fourth Amendment. Privacy is a right afforded to us by our constitution, and one that we must continue to defend. We should never need to pay for privacy, as Apple would have us believe.

Filed Under: Save Money Tagged With: Advertisement, Apple, apple pay, chromebooks, data, Google, Hack, Hackers, iCloud, Marketing, Privacy, private, Security

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