Archive for January, 2007

So This Mortgage Broker Walks Into a Bar…

January 30, 2007

Mortgages remind me a bit of dentistry – really important but not a lot of fun to talk about. My good friend Kerry is the chief marketing officer at a Japanese lending company. He’s done a whole series of advertisements on what it feels like to take out a mortgage.

http://video.jjloan.jp/index_en.asp

Climb
My favorites are “climb” and “kitchen” but they are all pretty funny. I’m impressed with these ads because Kerry has been able to do two truly rare things in the series: 1) make home mortgages funny, and 2) star in his ads (he is the voiceover and distinguished- looking gentleman at the end of each commercial). If I know Kerry, he did the work himself so he could save money.

Disclosure: I’m in no way endorsing JJLoan. I only know for sure that they make good commercials.

Goodbye, Bank of America. Hello, ______?

January 29, 2007

My first real bank was actually a credit union (Navy Federal) while I was in the Marine Corps – they were great, but I was a young, indifferent customer.  After I got out of the Marines in 1993, I signed up with Bank of America and have been with them ever since.  For the first 10 years I didn’t really think about my bank: when I wanted online banking they had it, my ATM card always worked…there wasn’t much else I needed.  In 2003, I decided to apply for a home loan and after a quick look at BOA’s high rates, I knew there was no chance that I would get my loan from them.  In 2005, we started Wesabe and that involved the movement of non-trivial amounts of money, and BOA was a royal pain at every stage.  Last week I decided to take a good hard look at BOA and here is what I came up with:

  • My checking account has fees (not sure why)
  • The savings account rate isn’t competitive
  • I don’t have my home loan through BOA
  • I do have an MBNA credit card, but that came through an acquisition and they still haven’t properly integrated it into online banking

I do know the bankers at my local branch. Chris K. has been a pleasure to work with (he went to Beverly High and I want to Venice High), and the branch manager has done everything she could do to help despite bank policies.  Still, I think we are at a structural parting of the ways – I don’t like being constantly reminded that my bank gives crappy rates and sub-par products because they believe that inertia works in their favor.

If I could choose any financial institution to work with right now I’d go to USAA, but since I’m not active military they won’t take my money, so I had to look elsewhere.  My wife banks with Wells Fargo, but after my experience with BOA I want to try something a little more community oriented, so I decided to look for a credit union.

After Googling “find a credit union,” I got a page where I could enter in my zip code and it popped up 23 credit unions in my area. I was on number 18 before I found one I was eligible to join (with most, you have to have a certain employer or live in a particular area).  I clicked on the “About” page of the one credit union I could join and it took about a minute and a half to load, and the information and design left me underwhelmed.

I live in Alameda County and I work in the technology field.  Are there any progressive/aggressive banks or credit unions that people can recommend or who want my business?  I’m also going to ask this question on AskMetafilter and report back the results.

Welcome to the Wild, Wild West of Credit

January 27, 2007

What do multiple credit card accounts, option arm home loans, and 30% interest rates have in common?  Trouble.  Not guaranteed financial collapse, but a high potential for financial trouble.  They also push the edge: “Not credit worthy? Fine, we’ll jack up your interest rate.” “Don’t have enough money to buy the home you want? No problem…just pay the interest.”

The phrase that I have heard to describe these practices is the “democratization of credit.”  I think the idea has a place in our society, but another way to describe it is “the Wild West of credit.”  The Wild West has many new opportunities, and many ways for things to go horribly wrong.

Managing money is hard, and what I’ve noticed is that when financial institutions care, they come up with some pretty cool products.  I especially like this one from Vanguard. Don’t know a lot about asset allocation over time for retirement?  No worries, they handle it for you, automatically shifting your asset mix over time.

I’d like to see something similar for our bank accounts (not these choices from my bank).  Recently graduated or building your credit and don’t know how to manage debt-to-income ratios?  No worries, your bank/credit union will handle that for you.  You give 100% of your business to one financial institution and in return you have confidence that you aren’t building your financial foundation out of sand.  I also think it would be great if  banks offered transparency into why a certain credit limit has been set, what a realistic allocation of your income should be, etc.  The basic account could be very simple: checking, savings and a credit card based on income and credit history.

The customer would have to acknowledge limits (more credit doesn’t mean more money), but as long as they stayed within the plan they could also be confident that they were on the straight and narrow.  The wild west can still be out there (I’m not recommending we limit choice), but those who want it can find a safe harbor with lower risk.

Full disclosure: I’m not now nor have I ever been a banker.  While this kind of account may not be a match for most consumers, I think it could really help others who are seeking guidance and stability. Perhaps even more importantly, it would show that banks were interested in actually helping their customers as opposed to just maximizing revenue opportunity and minimizing risk.

Using Wesabe from Iraq

January 25, 2007

I’m a member of USAA, which primarily serves US military officers and their families. I’ve talked about USAA and how much I like them several times on this blog (including here, here, and here), and as a result, a lot of military members have been finding Wesabe when they search Google for USAA. I’ve gotten a number of support requests from people stationed overseas, asking about ways to use Wesabe while deployed in Iraq or elsewhere.

We’re very happy to do anything we can to make Wesabe more useful for people stationed overseas. If you have any requests for ways we could make it easier to manage your money, please drop me a line (marc at wesabe.com), or leave a comment below. Thanks for all the great feedback we’ve gotten, and let us know how we can help.

New features: bulk tag editing and CSV export (woo-hoo!)

January 25, 2007

One of the earliest and now one of the most frequent requests we get at Wesabe is for more ways to work with your tags. Once you start to get into tagging, you realize that there are lots of ways to make use of them for managing your money — but sometimes you might wish you could go back in time and make all of your transactions use whatever system you’ve developed.

bulk editNow, you can. Brad added a “bulk edit” form for operating on all of your tags at once. You can edit a tag to replace it with one or more other tags, or you can delete a tag. One great way to use this is to clean up any slight variations you have in your tags — I was using both ‘restaurant’ and ‘restaurants’ for a while, so this lets me choose one of those and replace the other with it.

You can get to tag editing by clicking the “Accounts” tab, and then the “[Edit]” link next to “Your Tags” in the right column.

Also, Coda added a CSV export tool (in addition to the XML export we already had). Click on your username at the top-right, and then “Manage your Account,” and you’ll see a link to export your data as CSV. Since Microsoft Excel (among many other applications) reads CSV files and makes spreadsheets out of them, this is a good way to be able to use your data (for instance, to give it to your accountant for tax purposes) after tagging it.

(We are, by the way, also working hard on CSV import, since many banks, especially outside the U.S., only provide data in CSV form. We’ll get that launched as soon as we can.)

We’re happy these are both on the site, as they were both very frequent requests. One of my favorite things is seeing support requests for a feature or a bug go way down all of the sudden — then we know we’ve really solved it. Keep letting us know what you need from Wesabe, and we’ll keep doing it!

Upcoming appearance: Ignite Seattle

January 25, 2007

ignite

I’ll be speaking at the upcoming Ignite Seattle! on February 13th. I’ll be giving a talk during the Ask Later sessions called, “Five Ways to Actually Provide Privacy in a Web Application.” I’ll be covering a few of the techniques we use at Wesabe that I think would generally apply to social, community web applications.

I haven’t been to Seattle in a few years. I’m hoping to get down to the Daily Dozen. If you’ll be at Ignite, please come say hi, but if you catch me with donuts, be warned that I get greedy with them. 🙂

Figuring out what all those bank fees mean

January 12, 2007

The ever-useful Red Tape Chronicles on MSNBC.com has a great story on trying to track down the “Service Fees” that show up on bank statements everywhere, every month:

The other day, colleague Andy Gallagher showed me his fee-laden Wachovia checking account statement, his blood boiling from unintelligible fees. But it was the “more info” thing that really stuck in his craw. You can see why by looking at the graphic below.

“What’s this for? I have no idea,” he said, pointing to the $3 fee on the screen. Seeing the swelling veins in his neck, I set out to find “more info.”

Bank fees are a powerful source of revenue for America’s financial institutions, and one of consumers’ top headaches. If it feels like the bank fee noose has closed tighter around your neck in recent years, it has. The Federal Deposit Insurance Corp. says the nation’s largest banks now generate 44 percent of their revenues from fees. Estimates of how much that amounts to vary between $30 billion and $50 billion a year, but it’s clear banks are rolling in money they take from customers, often without explaining themselves very well.

This is absolutely a huge problem for every consumer. The idea of banks charging fees where they won’t even tell you what they mean is, as far as I’m concerned, reason enough to leave that bank. Of course, they will tell you what it means — they just won’t make it easy for you to know:

Andy had the same question so many other American consumers find themselves asking every day: What the #%$& is this fee for? The Wachovia Web site provided no answer. Despite its lofty promise, there was no “more info.”

But Jim Baum, a Wachovia spokesman, did find “more info” for me. The service fee represents a recurring fee Andy is charged every month for the type of account he has, called a “simplified checking account.” Baum recommended that Andy upgrade to another, free account. I said that wasn’t the point.

“Why isn’t there ‘more info’ where the site promises ‘more info?’” I asked. […]

In the meantime, another Wachovia spokesman, Matt Wadley, pointed out, correctly, that the bank does have a 24-hour hot line customers can call with questions like mine.

Mr. Wadley is correct that you can call your bank to ask about a fee. When I recently called Washington Mutual about a fee listed on my bank account after an ATM transaction, though, they told me that they had no way of knowing the cause of the fee, and that I’d have to go to the branch where the transaction took place. When I did, that branch told me I’d have to go to the branch where my account was housed. So the process I had to take to track down a fee was:

  1. Go to WaMu.com and see that the fee had happened.
  2. Call WaMu’s 800 number and ask about the fee.
  3. Go to the branch where the ATM was and ask about the fee.
  4. Go to the branch where my account was opened and ask about the fee.

(I’ll talk more about this experience next week — it was, to say the least, instructive.) Why do they make it so difficult to track down these fees? The answer is breakage — the more steps they put in your path to request a fee reversal, the less likely you are to follow through. They don’t want to make it impossible, since that would be bad press; they just want to make it onerous, as onerous as needed to maximize fee revenue.

Every time you are told you need to make another call or complete another step, you should think, “This is designed to create breakage. They’re trying to get me to give up.” Then, don’t give up. Banks put this many steps in front of you specifically when it’s worth your while. When you give up, their revenue increases.

I’m glad the Red Tape Chronicles dug into these fees. As you saw, when they dug in, there was a free account alternative available. Look for these small monthly charges, call your bank, and say, “I don’t want to pay this fee. How do I do that?” If the answer is that the fee is required, change banks. (See also “A TOTALLY AWESOME economics paper” for more on this.)

New features: tag filtering, private goals, Super Happy Magic Check Autocomplete

January 12, 2007

We’ve launched several new features on Wesabe this week, two based on requests in the “Make Wesabe Better” goal, and one just for fun (though it turns out to be very useful).

First, in our spending and earning summary pages, we show the total of your transactions by week and by tag. In some cases, this isn’t what you’d want to see. For instance, as much as we might like to think of it this way, when you make a payment on your creditcard, that isn’t really “earnings” (dang). There are other examples, too — if you make a lot of purchases for your job, you might want to keep those out of your personal spending report.

To help with this, we’ve added a way to filter tags out of your summaries. In the upper-right corner of each summary page, you’ll see a small form, which lets you choose the tags you want to exclude. One way to use this would be to tag all of your transfers between your accounts with the tag ‘transfer’, and then to filter the ‘transfer’ tag from your summaries. Or, you could filter ‘workexpense’, or as many tags as you want.

InvisibleSecond, we heard from a user (who shall remain anonymous) a while ago that he didn’t want his user icon showing up as a member of a certain goal — he was saving up for an engagement ring, and wanted his Intended to try Wesabe but not to find out about the ring he was planning to get her. I was married just last year, and had a fabulous time surprising my now-wife with her engagement ring, so I was, ahem, very sympathetic! As a result, we’ve added a way to keep your membership in a goal private. By default, when you join a group, your membership is public, but if you look at the goal page, you’ll see a link that says “You are a public member of this goal.” Click that link, and it will switch to “You are an invisible member of this goal.” When we launched this, the “Save Up For The Rock” goal, pictured above, suddenly plummeted in membership, as the people in the goal turned on invisibility. That’s great — and congrats, folks.

Finally, we try to make editing your transactions as easy as possible on Wesabe. If other members of Wesabe have edited the bank’s name for a merchant to a better name, we try to give you that cleaned-up, easy-on-the-eyes name automatically. Our goal is to make it so that all of your transactions appear edited as you’d want to see them — not in the form your bank uses for its bank-end systems.

With checks, though, this doesn’t work. If one person edited “Check #234” to read “Pacific Gas & Electric,” that doesn’t mean that everyone should have that edit applied automatically — you probably wrote your check #234 to someone different than I did. Fortunately, with some bank online bill pay systems, we get better data and can apply edits automatically, but for old paper checks, we wanted something more useful.

What we came up with is a feature we call “Super Happy Magic Check Autocomplete.” This gives you an autocomplete list of merchants you’ve written checks to in the past, sorted by how close in amount this check is to those. For instance, if you normally write a check to Sprint, your check amount will vary a bit based on how much you used your cell phone that month. The amount, though, is probably a lot closer to your last check to Sprint than it is to your rent check (hopefully!). By putting the closest amounts at the top of the list, you don’t have to type anything at all, but instead can just click on the name field, and then click on the payee to whom you wrote this check. This makes us, at least, Super Happy — editing checks is much easier, now.

We’ve got a lot of new features coming up soon, and we’re always happy to work on the things people ask for most. If you want to talk over which features matter most to you, join “Make Wesabe Better” and let us, and the community, know.

I also just wanted to say thank you to everyone who have given such fantastic and helpful feedback since our launch. Every single day, we get messages telling us how happy people are with Wesabe, and how we can improve the site for them. The community has been incredibly, unbelievably supportive and responsive, and has given us a fantastic list of ideas and suggestions for making Wesabe work better for everyone. You are Wesabe, and you’re making it a fantastic, supportive place for people all over the world (almost 100 countries now). Thank you, and please keep letting us know how we can make Wesabe better.

Upcoming Appearances: SXSW

January 11, 2007

sxsw.gif I’m happy to be speaking at SXSW Interactive in Austin, Texas, this year, as part of “Barenaked App: The Figures Behind the Top Web Apps.” The session will be Monday, March 12 from 10:00-11:00 am. I was born in Texas, but have only been back once or twice since I was very young, and have never been to Austin or SXSW, so I’m looking forward to it. If you’re attending, please drop by and say hi.

New Wesabe screencast: The Basics of Tagging & Editing

January 10, 2007

We’ve posted a new screencast, “The Basics of Tagging & Editing,” to help you get started organizing your money with Wesabe. This quick tutorial (6:40) shows you how to take advantage of Wesabe’s community editing features, and how to keep track of where your money is going using tags. (If you haven’t already seen it, our first screencast provided a tour of Wesabe and showed off the features of the site.)

Let us know what other topics you want to see covered in these screencasts.