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Eliminating Fees

Calling Out the Banks: Fix the Overdraft Market

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Overdraft protection sounds like a program that would, I don’t know, protect you? Instead it helps lessen the fees but still gives banks the opportunity to charge you $10 to $12 (if not more) for transferring your money to cover an overdraft.

Understand what you’re up against

When I worked in banking, we would look at certain warning signals.  If a product is excessively complex and extracts revenue that is exponentially higher than the cost of providing the service, then something is wrong.

I believe the overdraft market in the US is fundamentally broken, and has morphed into the worst type of predatory lending.

I have a really simple solution, and banks all over the world are already doing this.

  • Declining a transaction costs banks fractions of a cent, so charging consumers a $35 decline fee is obscene.  The most they should charge is a few dollars. Some new entrants charge nothing at all – and they are right to do so.

  • An overdraft is a short-term loan.  Lets stop talking about fees, and start talking about interest rates

    • Checking accounts should have a disclosed overdraft limit.  In other words, you should know that you can go up to $500 overdraft

    • The bank should charge a fair interest rate for the money you borrow – and only for the days that you borrow the money

Some banks are reasonable when it comes to overdraft

First Direct, one of the most popular banks in the UK, offers the following:

  • Free overdraft protection up to $250

  • A line of credit above $250 (the better your credit score, the higher the available line).  The interest rate is about 15%.  You don’t pay a fee-only interest for the days that you use the credit line.  So, if you borrow $100 for 7 days, you would pay about $0.29.

  • If you use your entire overdraft line, and the bank declines additional transaction, you pay nothing.

Banks should make money.  This is not a charity.  But they should offer transparent pricing that is easy to understand and compare.  And the profit should be in line with the cost of providing the service.

Consumers should be able to compare and choose the best option – just like any other consumer product. Fortunately, we’re helping you do just that.

Banks that respect you and your money

Consider switching to an internet-only bank. I have made the switch.

If you have a few instances of going overdraft because of a simple mistake, then consider Ally Bank.  You get one of the best interest rates on the market for your savings account. And, if you go overdraft, Ally DOES NOT CHARGE YOU for transferring money from your savings account to your checking account.  Why you ask? Because, it doesn’t cost them anything to do it!

If you go overdraft because you need the money, then Capital One 360 might be right for you. This is the old ING Direct.  They act a lot like First Direct of the UK: no overdraft transfer fee, a line of credit, and you only pay interest for the days that you are overdraft.

If you never want to go overdraft again – and wish the bank would just decline your transaction and not charge you a fee, then look into Bluebird or Serve (both from Amex). Bluebird is in partnership with Wal-Mart.  You can never go overdraft, and you will never be charged an NSF fee.

Even if you love brick-and-mortar bank branches, do the math to see if switching to an internet-only bank could save you a substantial amount of money in fees – and don’t forget the cost of gas!

Want to know more about Internet banking? Check out this article.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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About MagnifyMoney

State of Our Finances: The MagnifyMoney Survey

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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We launched MagnifyMoney because we believe people are paying too much in credit card interest, paying too many complicated overdraft fees and not earning enough on their hard-earned savings.

Banks are in the business of borrowing money from people in the form of checking and savings account deposits and then lending that money to people who need it through loans or credit cards. Right now, banks are charging very high rates on credit cards, and paying very low rates on deposits. They sit in the middle and enjoy rich profits.

But how much money are Americans leaving on the table (or in banks’ pockets)?  We decided to conduct a national survey to see just how much money people are losing to the banks’ fine print and fees.

Savings

Of those surveyed, 73.4% of Americans keep their money in an old-fashioned branch bank account. That means they are likely receiving 0% on their checking account money and 0.01% on their savings account. Yes, the big banks are paying an average of 0.01% on their savings accounts – that is not a typo.

Of those Americans who have a savings account, the average amount sitting in the bank was was $28,696. If, instead of giving money for free to branch-based banks, people switched to FDIC insured online savings accounts, like the ones offered by Barclays, GE or Ally Bank, they could earn close to 1%. Rather than earning less than $5 a year, they could be getting over $250.

Overdraft Fees

An overdraft happens when you spend more money than you have in your checking account. According to our survey, it has happened to 35% of us. But why do people go overdraft?

53% are just forgetful (mistakes happen).

47% of people go overdraft because they need the money: the month lasts longer than their paycheck.

Last year alone, Americans were charged $32 billion in overdraft fees. According to the CFPB, the amount in annual fees, on average, for accounts that had at least one overdraft was $225. Why so much? Every incident of overdraft costs $35 and banks will charge multiple incidents per day. For example, Bank of America could charge up to $140 per day – even if you only were overdraft by $20 (4 transactions).

Our survey showed that people are definitely fed up: 69% would like an account that does not let you go overdraft and charges no fee to decline. Fortunately, such products exist – like the internet bank Simple and Bluebird by American Express. We hope to help people find these products.

Credit Card Debt

42.4% of Americans have credit card debt. The average balance of those surveyed was $10,902.

Now, you will often hear that the average interest rate is 15%. However, at MagnifyMoney we know that credit card companies engage in risk-based pricing. That means lower interest rates are given to people who pay their balance in full every month and higher interest rates are charged to people who are likely (or have historically) revolved.  That means they pay less than the full balance, and then have to pay interest.

Our data proves this. 75.7% of those with credit card debt, paid an interest rate higher than 15%. The average monthly payment on that debt is $408. At an 18% interest rate, that means the average American will pay at least $1,707 in credit card interest over the next 12 months.

Think about it this way: banks will pay (savings account deposits) 0.01% for money.  So, for $10,902 a bank would pay about $1 in interest. Then they turnaround and charge the average American $1,707 in interest. Not a bad business.

Fortunately, there are options out there to help people save money. Fifty percent of Americans with credit card debt have considered a balance transfer. Of those who completed a balance transfer, 89% would do one again. However, there are still many misconceptions about balance transfers.

People don’t understand how the interest charges work — 31% think interest is charged retroactively and 35.2% don’t know how it is charged.

Some people don’t get the full benefit of the balance transfer because they spend on the card (46.7% of people do that) or by pay late (25% of people fail to pay on time).

Rather than looking online for the best balance transfer offers, an amazing 68.5% of people respond to a direct mail offer.

But, if you choose a market-leading balance transfer, pay on time and don’t spend on the card, the average American could save more than $1,300 over the next 12 months.

Personal loans could also be a great option if you can’t qualify for a balance transfer (or don’t trust yourself with another credit card). Only 36.5% of people with credit card debt considered a personal loan

The survey results are clear

At MagnifyMoney, we believe that people are not getting enough on their savings (less than $4 a year). We think they are being charged too much for overdrafts (an average of $225).  And they are paying way too much for their credit card debt ($1,707 a year).  We think the results of our survey are clear: people are paying far too much for their banking products and services.

The good news: alternatives exist.

State Of Finances

State Of Finances

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Consumer Watchdog

Stop the madness: 6 ways to make overdraft pricing fair

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Dear Banks,

At MagnifyMoney, we were shocked to see that banks are charging effective APRs in excess of 1,000% for short-term loans.  We encourage you to consider our wish list below.

1. Stop charging to decline electronic transactions.  Declining an electronic transaction doesn’t cost you a thing.  Yet, you charge me $35 for this service.  If my gym sends a recurring electronic transaction, and you decline that transaction (electronically), then you shouldn’t be making $35.

2. Tell me my overdraft limit.  I know that you have assigned a credit limit for me, and it averages between $200 and $1,000.  (The CFPB told me that in their report, but I also worked at a bank and know that is the case).  Can you please tell me what my limit is?  That way I know my buffer and can plan accordingly.  Don’t tell me it is more complicated – because it isn’t.  When I don’t have information, I live in a constant state of stress. I know you don’t want to cause me unnecessary stress.

3. Stop charging fees and start charging interest.  When you approve an overdraft, you are giving me a loan.   Please charge me an interest rate on my loan, not a flat fee per incident.  Can you really justify charging me $35 for a $6 loan?  I understand personal loan fees: you have to cover the cost of acquisition and underwriting.  But I cannot understand the reason for this fee, other than excessive profiteering.

4. Charge a fair interest rate on my line of credit.  Nothing in life should be free.  Short-term borrowing is a convenience and a service, and you have every right to charge for it.  As a bank, you probably pay (on average) 2% to borrow your funds.  You need to make a good margin.  I believe 9.99% would be a good starting point, earning a healthy return.  If I have a bad credit history (or not much of one at all), you can charge more.  But be transparent about the pricing.

5. Stop the overdraft death spiral.  When you increase the price of something, fewer people use it.  In the case of a loan, the more you increase the price, the less it is used as a product of convenience – and the more it is used as a product of desperation.  You depend upon overdrafts for revenue. When the government gave us the right to opt out on Debit and ATM overdraft (about 40% of transactions), you increased the fees on everything else by about 40%.  Coincidence?

6. Don’t make me recommend a payday lender.  As a retail bank or a credit union, you should have the ability to put payday lenders out of business.  You already have the customers, so there is no acquisition cost.  You have a ton of data between my account history and my credit bureau.  You have a low cost of funds.   I have no doubt you can put them out of business, if you want to.

We understand you have to make a profit, but we’d like to see higher-levels of transparency (and general decency) for your customers.

Sincerely,
Nick and the MagnifyMoney Team

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Balance Transfer

Fire Your Bank and Cut Your Interest by 90% with a Balance Transfer

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High_interest

Credit card debt is nasty business. Every month you throw your hard-earned money at your debt and yet your balance never seems to go down all. Your stagnant balance is the result of a banker’s best friend: insanely high interest rates, which he happily applies to your credit card.

High-risk means high interest

The average interest rate on a credit card is often cited at 15%, but that number is misleading. Banks can average out a lower interest rate by awarding low-risk customers (people who pay their balance in full every month) a low interest rate – often below 15%. Simultaneously, they spike the interest rate on higher-risk customers who borrow money using a credit card. Those rates are often higher than 15% and can even tip the scale towards 30%.

What does that mean in real terms?

  • You have $10,000 of credit card debt at a 20% interest rate.

  • You will have a minimum payment of approximately $276

  • Over the course of a year, you will make more than $3,000 of payments

  • $1,893 of that is interest

  • That equals an average $158 per month of interest to the bank

That high interest rate means that your hard-earned money is going into the pockets of bankers, rather than paying down your debt.

It’s no wonder that in our recent survey, 78.8% of Americans with debt believe that their interest rate is too high.

How to pay off your credit card debt

To get serious about paying down your debt, you need to keep two things in mind:

1.  Can you pay more each month towards your debt?

2.  Can you reduce the interest rate on your debt?

We know that brown-bagging lunch and cutting the daily latte habit gives you a nominal sum to throw at your debt, but the most effective way to pay down debt faster is reduce your interest rate.

(All while living below your means of course.)

In the example above, you would be spending nearly $2,000 in the next 12 months on interest.  If you could cut that rate in half, you would take years off the time to pay off that debt.

Shopping for lower interest rates doesn’t show lack of character

Just imagine you are the CFO (Finance Director) of a business.  You borrowed money to fund expansion plans.  You are currently paying 20% on that debt.  Banks are offering interest rates as low as 4%.  But you don’t do the work to get the 4% interest loan, because you think it shows a lack of character. You borrowed the money, so you need to pay it off. It is highly likely that you would have a short career as a Finance Director. You would be fired. And your replacement would immediately re-finance the debt at 4%. The money saved could then be used to pay down the debt more quickly or re-invest in the business.

You should run your family financial affairs no differently. You should be looking to keep your interest expense as low as possible. You can then use the money you save to pay down your debt faster.

In most cases, the banks aren’t rewarding you for being a loyal customer. They aren’t operating with buy-nine-get-the-tenth-one-free coupons! Instead, the longer you have had your credit card, the more likely the rate is even higher than 30%.

Before the CARD Act was implemented in 2010, banks used to participate in a fiendish little trick called repricing. With little disclosure, banks could rapidly, dramatically and legally increase your interest rates. And they did it often

Just because you accrued debt on a card with Bank A doesn’t mean you should subject yourself to their abusive interest rates.

Time to start looking at a balance transfer

At MagnifyMoney, we love balance transfers. They are the single best way to reduce the interest expense on your credit card. If used properly — and you must follow the rules– you can slash your interest expense by 90% or more.

And when we did a survey, 89.1% of Americans who did a balance transfer in the past would do one again.

Not sure what a balance transfer is or how to get one? Don’t worry, we’ll take you by the hand and explain it all.

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Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Earning Interest

Are Bank Branches the Next Blockbuster?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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First, I must confess that I love bank branches and always have.  As a child, I used to enjoy going with my mom to the bank.  The people were friendly, the lollipops were tasty and I had a real sense of accomplishment when I could deposit a roll of coins.  My affinity for bank branches makes this article particularly difficult for me to write, but it contains good news for all of you out there who would rather do anything else other than go to a bank branch.

You can finally switch to internet-only banks and put hundreds of dollars back into your pocket.  Real choices finally exist.  In fact, after doing the research on the best bank accounts for MagnifyMoney, I switched to Ally (both checking and savings account).  And I doubt I will ever go back to branches.  (Note: I have not been paid by Ally, and they are not a sponsor or investor in this site).

How do traditional banks make money?

I used to work for large banks (like Citibank and Barclays).  Retail banks branches are expensive to run, but banks banks make a lot of money with their brick-and-mortar locations.  So, how do banks make money?

1.  You give them interest-free loans.  If you keep a lot of money in your checking and/or savings account (usually $2,000 is enough), the bank makes money by paying you virtually nothing, and then lending that money in the form of loans that make a lot more money.  When I worked at a bank, I loved “sticky, low-cost deposits” to fund our business. Every $1,000 you keep at the bank is about $20 of profit to a retail bank.  $20,000 savings accounts were the best.  We would make at least $400 a year.

2.  You pay them lots of fees.  If you don’t have a lot of money, then banks will make their money on fees.  Banks make the most money on overdraft fees.  Almost 70% of their revenue comes from overdrafts – which is the most expensive way to borrow money short-term that I have ever seen.  In addition, banks make a good chunk of money with monthly maintenance fees (those pesky charges if your balance falls below a minimum) or ATM fees (you use someone else’s ATMs).

And, although fees vary by bank – the differences are not dramatic.  The monthly fee at Citibank is $10 per month.  At Bank of America it is $12 per month.  You can save a little money at Citi, but the difference is marginal.  That is why building branches made sense for banks.  The product offering did not differ much – so people would choose banks based upon the proximity of the branch.

Credit unions are usually a little bit better than banks at both fees and interest rates.  Why? Because they don’t have shareholders.  Their customers also own the credit union, so the goal is to pay higher deposit interest rates and charge lower fees.  They do a decent job of lowering fees — credit unions have many more free accounts and much lower monthly and overdraft fees.  But while they can be dramatically better on some fees, they still tend to have hefty overdraft fees ($25 average instead of $35) and low interest rates on savings account (PenFed pays 0.05% compared to 0.01% at Bank of America).

Enter internet-only banks….

How do internet banks create a revolution in banking?

Amazon is able to charge less than Barnes and Noble.  Why?  Because they don’t have to pay for all of those bookstores and people.  Internet banking is no different.  By removing branches, you are removing the single biggest cost of banking.

So what can internet banks do with all the money they save?  They can slash the cost of routine, everyday banking for you and save you the cost of gas.

How does that add up for you?

  • Dramatically higher interest rates on your savings

The Bank of America Savings Account pays only 0.01% interest rate. Compare that to the best online savings accounts.  Right now Ally is paying 0.87% on savings, with no minimum.  So, you could earn $50 at Bank of America, or $435 at Ally on that $50,000 deposit!

  • Dramatically lower fees on your checking account

Ally, Charles Schwab and Bank of the Internet Rewards Checking (just to name a few) have no monthly fee, no minimum deposit and no requirement to keep the account free.  A real free account.

  • Actual overdraft protection

Online banks are revolutionizing overdraft charges.  Ally, Schwab and Bank of the Internet let you link your savings/money market account to your checking account.  If you make a mistake, they will transfer funds from your savings to your checking account – FOR NO CHARGE!

If you actually need to borrow money, Capital One 360 has created a line of credit that is linked to your internet checking account.  There is no overdraft fee, and interest is charged only for the days that you use the line of credit.  This is an incredible deal.

  • Reimburse you for ATM fees

Not only do internet banks not charge you for using other bank ATMs, but they also reimburse you for any charge that you may receive from the other bank.  Ally and Schwab have no limit on the reimbursement.  You can use any bank’s ATM for free!  With my Ally checking account, I happily go to the closest ATM when I need cash – and I don’t worry about fees.

  • Deposit checks with your mobile phone

MagnifyMoney did a survey of Americans, and the #1 reason people go to a bank branch is to deposit a check.  Now you can deposit a check by taking a picture with your mobile phone.  Ally Bank allows you to deposit checks with a value up to $10,000.  Thanks to the power of your mobile phone camera, you really don’t need a bank branch.

In an ironic twist: banks have made this revolution themselves. They have gone out of their way to push us into digital channels.  They want us to give up paper statements, deposit checks with our mobile and use the ATM.  Why?  Because they want marginal cost improvements.  Fewer people in the branches.  More part-time employees in the branch. But banks keep the savings of our digital banking.  They want us to make the digital switch so that they can make more money.  But  now we can make more money by switching to internet banks.

But are they safe?

Yes, they are safe.  All of these banks are FDIC Insured.  That means you have the same protections and rights as any other bank (up to $250,000).

In addition, a lot of these banks are actually being created by well-known financial organizations.  Ally has been created out of the shell of the old GMAC.  Charles Schwab is already well-known brand in its own right.  And some of the new entrants have been rapidly acquired by banks that know the world is changing.  Simple, an internet-only bank, was just acquired by BBVA – one of the largest banks in the world targeting Latin America.

Is the future finally here?

People are remarkably loyal to their bricks and mortar bank branches and banks know that. So, they pay 0.01% on deposits, charge $12 per month and $35 if you go overdraft.

But, for the first time, real competition is coming.  At MagnifyMoney we are thrilled to see the competition, and the money that it could save you. You can just see that these businesses have been designed to delight and satisfy customers. When my Ally Bank CD expired, they sent me a letter and gave me a loyalty bonus.  My rate would be 0.15% higher than the highest advertised rate – to thank me for being a customer!  Most traditional banks do it the other way.  They give big teaser introductory offers to get you to switch, and then it only gets worse over time.

But now with Ally, Schwab, Bank of the Internet, Simple and others – we will have a big incentive to switch – because the savings will go into our pocket and not the banks’.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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About MagnifyMoney

Meet the Team: Erin

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

erin_with_money_dog

Erin sat down with me to explain why she wanted to join MagnifyMoney and what’s on her mind when she isn’t reading and writing about money. 

What made you want to join the MagnifyMoney team?

The moment I started playing around on the site, I knew I wanted to be involved.

Debt is a serious issue in America and has hit the millennial generation especially hard. Between student loans and consumer debt, the average millennial isn’t set to retire until 73. Helping people, specifically my peers, get a handle of their debt and increase their financial savvy has been a personal mission and suddenly I was seeing a website that helped do just that.

When did you become interested in money?

At seven years old — oddly enough it was around the same time I really started hating math class.

I had a genius idea to make some quick cash by setting up a Krispy Kreme doughnut stand during my mom’s garage sale. My little sister helped me out and we used our general adorableness and lure of delicious glazed doughnuts to score big bucks for a seven and four year old. I think we sold them for fifty-cents a doughnut, which was a decent mark-up considering you could get a dozen for about $4.

After we sold out, I started counting up my precious earnings. During my meticulous quarter stacking process, my father came up and taught me a little lesson in net profit.

He had me pay him back for staking me in the initial purchase of the doughnuts and then throw my sister a few bucks for sitting there all morning, luring customers in with her big, baby blues.

Needless to say, I started becoming fascinated with how to earn money, maximize your ROI and keep as much in your pocket as possible.

We hear you had a unique childhood, tell us about it.

Other than going to the financial school of hardknocks, I did end up spending a lot of my young adult life in Asia. My family moved to Japan when I was 10 and stayed overseas for nearly 11 years. I repatriated to attend university and my family still lived in China for several more years.

When you aren’t writing about money, what do you like doing?

Does reading about money count?

I’m kidding — sort of.

Outside of work I actually like acting. It’s really expensive to take acting classes in New York though, so I started doing improv instead. There is nothing quite as scary as getting up on a stage with no clue about what’s going to happen next.

I also try to travel as much as I can and can usually be found plotting my next great adventure.

Now that you live in an expensive city, how do you have fun on a budget?

New York is incredibly expensive when it comes to housing, but there are actually a lot of activities to do for cheap or free — they just usually requiring standing in line and doing some waiting. The summer is a great time to live in (or visit) NYC because there are outdoor concerts, movies in the parks, street fairs and my favorite: Improv Everywhere’s Annual MP3 Experiment.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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About MagnifyMoney

Meet the Team: Brian

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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We sit down and chat with MagnifyMoney co-founder Brian who gives us some insight about why he wanted to start MagnifyMoney and a few tips on his out-of-office hobby: reward travel.

Why did you start MagnifyMoney?

It’s rare that everything comes together to let you build a team with a close friend and supportive advisers, so when the chance came I didn’t dwell long. My old job involved calling out some big companies on things that didn’t make sense in order to help investors. Now we get to do it on behalf of consumers.

What is your first money-related memory?

Well, I did always insist on handling ATM transactions for my mom as a kid — but really the first memory happened one summer in the 80s when Almond Delight cereal had a cool promotion. Instead of putting a free action figure inside of each box, Almond Delight put plastic wrapped money in the boxes, usually replicas of old money no longer worth anything.

But 1 in 43 of those boxes had real money in them and I learned the hard way that there wasn’t much to be made stocking up on cereal boxes. Fast forward 20 years and I ended up in brand management for one of America’s biggest cereal companies.

If you could only use one credit card in your wallet for the rest of the year, which one would you pick?

My United MileagePlus Select Visa. It earns 2x points on groceries, 3x on United purchases, and I get miles toward United ‘Premier’ status each year. For all of the bad press United gets, its miles are still incredibly flexible if you know their system. And this card is no longer issued, so I don’t want to lose it.

We hear you like to capitalize on reward travel, what’s the best trip you’ve taken on points?

My favorite was flying to Japan, Germany, and Turkey on one award ticket over the course of 12 days. A little jet lagged, but spending time in each for the price of one flight was great. There’s a whole subculture of people who do much more than that frequently, but I usually put my efforts into getting where I need to go as comfortably as possible for as little as possible.

Do you have a trip you’re planning on taking next using rewards?

I’m looking forward to going to Sicily with my Delta SkyMiles on Alitalia, saving lots on airfare.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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About MagnifyMoney

Meet the Team: Nick

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

_nick-log

We interviewed MagnifyMoney co-founder Nick Clements to hear a little more about the origins of MagnifyMoney and what Nick does when he isn’t looking to help save people money.

Why did you start MagnifyMoney?

When I was working in London, a man named Martin Lewis inspired me.  He started as a personal finance reporter, and has an absolute obsession with finding people the best deals. He later built MoneySavingExpert.com in the UK – the premier destination for anyone who is confused by complicated financial products or wants to save money.

I think he did two things brilliantly:

1) He made it easy for people to make better financial choices

2) He was not afraid to speak up when he thought products or practices were unfair.

When I ran the largest consumer credit card business in the UK, his words would be listened to and acted upon.

I am thrilled that I have the chance to build something like his business here in the US.

How did people react when you told them about your career change?

I was surprised by the reaction.  I thought people would be skeptical.  I was lucky to have reached a very senior position at a young age – so why walk away so soon?

But the overwhelming reaction has been support and enthusiasm.  Some people still think I was nuts to away from my job, but most people have been incredibly supportive, and not surprised that I took a risk.

How many places have you lived?

Too many.  In the US I have lived in 6 states.  I have also lived in England (London and Manchester), Switzerland (Zurich), and Russia (Moscow).

And, when I was a student, I spent most of my junior year in Florence, Italy.

Which three are your favorites?

An impossible question to answer!  I liked all of them for different reasons.

For best weather, nothing can beat southern California.  And I am always happy to visit my mom in Laguna Niguel and enjoy the sunshine and beach.

London was just a wonderful place to live.  A beautiful city to live in, and it is so easy to explore Europe on weekends.

But Italy still holds a soft spot in my heart.  Who doesn’t want to be surrounded by rolling Tuscan hills, bottles of amazing wine, plates of incredible food and a culture that slows down life a little bit – and focuses on friends, family and the value of time together.  (It may have helped that I was a student when I lived there!)

Can you remember the first thing you ever purchased with your own hard-earned money?

I can! When I was in grade school, I started a dog walking business. It slowly morphed into a dog-watching franchise. I would “sub-contract” and play a supervisory role, and had other reputable dog-watchers working for me.

I remember having a few hundred dollars in cash at Christmas time. I was so proud to be able to buy Christmas presents for my family, with my own money.

What was your first credit card?

Wells Fargo for Students. They had a deal with my university, where I could get a totally free checking account and a credit card that came along with it.

I remember enjoying the picture of the stagecoach on the plastic, and the sense of history that Wells Fargo had in their brand identity. (That is a true story. I have always been a nerd when it comes to finance and branding).

Do you still use it?

Absolutely not!  I soon learned that you shouldn’t choose credit cards based upon the picture on the plastic.  And, bundled products (you have a checking account, and now I sell you a credit card) usually don’t give you the best deals.

You need to look for the best individual product – and I am now earning great rewards!

If you had to spend all your credit card rewards tomorrow, what would you purchase?

I still have an insatiable desire to travel.  I would see how far I could go with my points, and then I would go there.

How do you spend your time outside of the office?

Walking, running, eating and reading.

I have two rescue dogs, and my wife and I love our long walks in the park (weather permitting of course).  During the weekend, we usually spend at least two hours with them outside.

I love to jog.  After a nice run, I am energized and usually have better ideas than when I started.

I love a good meal with amazing people. Italy really taught me that there is nothing better than a few hours sharing food with your friends and family.

And I have always been one to bury myself in books.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Meet the Team: Goofski

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Goofski comes to us after a journey from Moscow to London to New York. He desends from a long line of savvy street dogs which gives him the smarts to be the ultimate consumer watchdog. Let us know in the comment section if you have anything you want Goofski to be sniffing out!

Tell us a little about your backstory

I was born in the sleeping district of Moscow.  My mother was very sick, and a nice old lady took my mom and all of my brothers and sisters into her apartment.  She put an ad online, which was read by Margarita (the wife of Nick).  They came to the apartment, and decided to take me home.

I was told they chose me because I was the quietest puppy there. But that was just an act!

How do you try to save money?

I am very bad at saving money.  I tend to give into every temptation.  I always tell myself that I shouldn’t spend money, but as soon as I see a new bone or a new type of dog food, I find myself indulging.

What exactly will be your role as the Consumer Watchdog?

I come from a long line of street dogs.  We have amazing noses – and can sniff out anything.  At MagnifyMoney, I will be spending my time sniffing out bad deals and bad practices by banks.  I plan to pen (with a bit of help) a weekly article called Watchdog Wednesdays.  Please let me know if you haven’t been treated well, and I will try to help!

When you aren’t sniffing out shady business practices, what are you up to?

I love going on long walks with anyone who will take me, and I love good meals.  In many ways, I am no different from Nick.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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