Financial


I have been a loyal ING Direct customer for many years. I am an early adopter of many things such as: Internet only banking (ING), home VoIP (Vonage), and online restaurant reservations (OpenTable). So I really enjoyed it when ING Direct started advertising and were written up in the book Mavericks at Work.

I felt pretty good about the fact that the national average for interest bearing accounts was about 0.53% and I was getting a whole 4.40%. I felt good about it until yesterday when I learned that ING Direct is really on the low end of high yield savings accounts. Here’s a short list of other options (unless otherwise noted these have no minimum balance requirements.)

Now, compare this against the 4.40% interest offered by ING Direct and I feel less than excited. In fact, I’m strongly considering switching my business from ING to Emigrant, something most customers are said to “never do”. According to a NYTimes article earlier this year, savings account customers are less volatile than credit card customers.

Unlike credit card users, who freely hop from one product to the next to get a better rate, savings account holders tend to be more loyal, Mr. Newman said. Thus, he said, HSBC Direct does not feel compelled to offer the very highest yield.

It seems ING Direct feels the same way and is now (5 months later) does not even make the top 5 of high yield savings accounts. In fact, when you google for those words, the ING Direct website does not make the first 10 pages of search! (I didn’t try to go deeper) Instead the competitors do: Comerica, Citibank, Emigrant Direct, Bank of America, GMAC Bank, E-Loan, MetLife Bank, Capital One, Ameriprise Financial, and the AmEx One card.

According to a BusinessWeek article on Where to Stash Your Cash:

Thanks to the Federal Reserve, cash holdings are attractive again. Since June 2004, the Federal Open Market Committee (FOMC) has gradually raised the fed funds rate (what banks charge each other for overnight loans) from 1% to 5%, causing rates on money funds to edge up also. Considering the recent tough talk on inflation by Fed members, interest rates could head even higher.

It’s a good article that goes on about online banking:

When picking a short-term cash repository, experts say you should consider both yield and convenience. It’s fairly easy to determine the current yield champs. Online services post rankings of the top-yielding bank money-market accounts and savings accounts (Bankrate.com) and money-market funds (iMoneyNet.com) each week. At the top of the rankings, banks and funds generally offer comparable yields. “They are neck and neck with each other,” says Greg McBride, senior financial analyst at Bankrate.com.

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So, I’ve been looking for a new credit card, one with a better return rate than the 1% I get with Welld Fargo. I’ve been eyeing the American Express “Blue” card because it… well, because it looks good. Of all the credit cards out there I want one with a good rewards program. Some people look for other features such as:

  • Low APR
  • No annual fee
  • Carry-over balance
  • Rewards programs
    • Airline
    • Hotel
    • Cash back (gift cards or just plain cash)
    • Savings account (FDIC insured high yield savings account or college fund)

The American Express web site has a great feature that lots you choose the best card to fit your lifestyle. I think all credit card companies should offer an application like this. Visa has the Card Advisor, but it’s a little hard to find on their web site. MasterCard has something similar on their site under personal cards, but… well, their site just needs a total re-design. It has the feel of 1995 with no real use of CSS or any dynamic HTML (other than the DIV float-over survey they ask you to take.)

Another thing I like about that application is that it’s designed in Flash rather than Java. (I have nothing about cross platform but Flash just has a better usability factor than Java applications as I’ve mentioned before.) The one thing I don’t like about the AmEx application is that when you select a card it browses to that page within the same window instead of opening a new window. That means each time you want to look at a new card you have to re-start the Flash application and make all your selections over again. It’s really annoying.

MasterCard has a flash based application. Although their find-a-card section is hard to find, their application is well created and when you select a card it opens a new window with information about that card. Good job on the target=”_new”! I also like that you can drag-drop up to 4 cards into the top panel of the application and “compare” them. I like this feature.

Of course there are also business cards, but we are looking for personal cards here. Most of my credit card related expenses are due to travel (hotel and airline) so credit cards that cater to shopping/grocery expenses were moved to the bottom of our list. The two AmEx cards we looked at were the:

  • Blue: Although this card purports “up to 5% cash back” it’s not really all that great, other than it looks cool. You only get 1% on everyday purchases and 0.5% on all other, up to $6,500. Anything over $6,500 gets you 5% on everyday purchases and 1.5% on all others. This sounds great until you see the definition of “everyday purchases” as: “U.S. supermarkets, gas stations and drugstores”, which is a small portion of all my expenses. I mean who spends more than $6,500 annually in those stores anyway? Also, there is no annual fee.
  • TrueEarnings (from Costco): This card, although it looks bad and is nothing I would feel proud to show others, does offer a good rewards program. The down side is the high interest rate, but if you pay your balance off at the end of each month it should not be an issue. Also, there is no annual fee (if you already have a Costco membership). The rewards include:
    • 3% cash back when you eat out at any restaurant or order for home delivery
    • 2% cash back for traveling-airline tickets, hotel stays, car rentals, and cruises
    • 1% cash back on all other purchases

As for Visa cards there are a few that were recommended. Now I have been down the road of the Visa Signature card and it is not all it’s cracked up to be. It tries to emulate the AmEx theme of being a “no limit” card and offers many benefits, none of which I ever took advantage of. The one big benefit is that it feels really cool to have one. I really enjoyed simply knowing that it was a Signature card, slightly like but not nearly as impressive as the AmEx Black card.

  • Chase Freedom Visa Card: Similar in most respects to the AmEx Blue card. Still getting 3% cash back on “eligible Gas, Grocery and Quick Service Restaurant purchases” and 1% cash back on everything else. Beware that word “eligible” … grrr.
  • None of the other cards had anything more than 1% cash back.

As an FYI, there exists one Visa Signature cards with no annual fee. Can you believe it? It’s really hard to find and only offered by Chase/BankOne, but look for it and you might find it.

Unfortunately none of the MasterCard credit cards offered anything more than 1% cash back. I was so suprised, but this just put them all out of the running.

I guess this means that although I don’t like the design or look of the AmEx TrueEarnings card, in the end, it’s the best one for me financially. There is no annual fee because I already have a Costco membership.

Speaking of which, did you know you can get gas at Costco also? Even though I shop only for a family of 2 and we still buy most of our groceries at other stores (Target and Safeway), the few purchases and now gas we can get at Costco more than pays for the membership.

The DHS daily open source infrastructure report said today that, “Gartner calls on banks to adopt Web 2.0 technologies”

Financial services firms should use Web 2.0 applications such as wikis, podcasts and blogs in order to improve cross−enterprise collaboration and deliver personalized information to clients, according to Gartner research group. The report says that engaging with customers through call centers and via Internet campaigns is no longer sufficient and recommends that banks adopt Web 2.0 applications in order to provide personalized services to customers. Banks should also deploy RSS syndication, podcasts, and tags to deliver content covering online banking security and financial education topics. (Gartner report)

Now, I agree with these statements 100% but it reads like someone who knows little about the Internet wrote a Web 2.0 Mad Libs for banks. It’s like saying that houses should be built with strong materials to withstand natural disasters.

Sure it sounds good in theory, but what is the cost and will they use it? It’s almost as if the writer had just watched Field of Dreams and though, “If the banks build it, they will come.”

In all practical terms I can see Credit Unions implementing these items long before Banks adopt them because they are member owned while banks are more bottom-line orientated.

I don’t know why but I get more hits to my site from searches for “carding” information than any other topic. Recently I received a comment from Iceman, administrator on the Cardersmarket (CM) web board. This was an interesting turn of events because CM is an online forum devoted to the dissemination of information on credit card theft, fraud, and all the implements of how to do it.

According to Iceman CM is nothing more than a venue for the information, but not a place where actual credit card fraud happens. This is analgoud to 2600 for phone phreaking information or what Napster was for MP3 sharing. I can almost bring myself to agree with him except for the fact that people are actively swapping and selling stolen credit card numbers. CM is definitely no Boa Factory but still it’s up there with the others like ccpowerforums, darkmarket, darkpay, thegrifters, theftservices, and the old scandinaviancarding.

One of the old participants on CM was a guy nicknamed El Mariachi. He worked with law enforcement on a few things and burned bridges moving on to create his own forum TheGrufters. According to Iceman from CM, TheGrifters VIP section is just like the CM forum. There is drama between the two as they trash talk each other on their respective forums, but it’s interesting to hear them go at it. I don’t even care who is right because I’m learning more and more about the subculture just by listening along.

I downloaded the podcasts from TheGrifters and will check them out … in the morning when I’m not so sleepy.