MagnifyMoney was created by Nicholas Clements and Brian Karimzad. They went to college together in the '90s, and teamed up last year with the goal of saving American consumers over $1 billion.
Great question (and we like what you're thinking). We will continue to expand MagnifyMoney's product offerings over time. But we started with what we have for three simple reasons. We looked for products where 1) people are paying too much; 2) real alternatives exist; and 3) making the switch is relatively easy.
MagnifyMoney generates revenue by receiving compensation from some of the financial providers whose offers appear on our site. But we would never rank products based upon the commission. We explain how we keep the site free and un-biased for users here.
MagnifyMoney will succeed only if our customers trust us. You will know any time we are getting a commission based on a recommendation. Unlike other financial product review sites, this commission has nothing to do with our recommendations, which are tailored specifically to helping you find the best deal. The idea is to get banks to offer products with more transparency and value so we can both get paid and recommend their products near the top of our lists.
We've begun by looking at the top 50 banks and credit unions. Over time we will add more. If a small bank or credit union has a product you think is better than the ones on our tables, please let us know and we'll add it. Nothing makes us happier than David giving Goliath a run for his money.
Banks made over $60 billion last year from interest on credit card debt. If the market was truly competitive, those kind of returns would be much lower. People can significantly reduce the interest they pay by taking advantage of balance transfers and personal loans – which is why we have recommendations dedicated to both. Ultimately, we hope that MagnifyMoney will encourage banks to improve products over time as they become forced to compete for your business.
The fees for going overdraft in the US are insanely high and ridiculously complex. Banks generated over $30 billion from them last year alone. Our goal is to help people choose the right account, and the right options within that account, to dramatically reduce the fees. With some of the new entrants, we actually have the opportunity to cut overdraft fees in the U.S. by 90%.
Many Americans keep rainy-day funds in a bank savings account. But these accounts earn account-holders close to 0% interest. Although nearly all savings interest rates are low, you can get close to 1% by switching to an online savings account while still getting FDIC insurance. We see people all the time basically giving interest-free loans to their bank, and we don't think they realize it (nor do we think banks deserve it).
The current credit card model is based upon merchants paying credit card companies an average of 2% for every transaction (higher on American Express). This is called interchange. Cash back credit cards share some of that money with you. Think of it as a rebate. Credit card companies generated over $60 billion of interchange revenue last year, and we believe consumers should be getting as much of that as possible. Due in large part to marketing, cash back products can be especially confusing. We want to help people crunch the numbers and choose the right card (or cards) for their lifestyles.
The credit card industry in the US is guilty of advertising a very low rate, then quickly increasing the rate through fine print. Complicated products can lead to much higher costs over time. Personal loans, on the other hand, have a fixed interest rate and fixed term. We think the time has come for personal loans to grow exponentially in the US. Our friends in Germany love personal loans, and refuse credit cards. They borrow like Americans, but they pay a lot less. And we hope that MagnifyMoney can help push personal loans providers to lower rates and increase competition by becoming more widespread.
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