Looking for some help with personal finances, such as finding a better credit card? Several online sites are waiting to help.
The best-known is Credit Karma which ranks as a “unicorn” — i.e. worth over $1 billion — in a recent Fortune study. Pretty impressive for a company that Kenneth Lin founded in 2007 to offer free credit scores and other information to consumers. The widest range of products covered is NerdWallet which provides information and evaluations on credit cards, bank accounts, online investment brokers, insurance and mortgages. Magnify Money has the largest number of credit cards and the most detailed information on them, according to an evaluation on Reddit.
“MagnifyMoney: It was pretty amazing how many cards are listed…The level of detail on each card is great.”
NerdWallet’s founder Tim Chen said he was an analyst on Wall Street when he saw his parents in an investment that cost them 5 percent to leave. Then his sister couldn’t find a way to see which credit card was best, so he built a decision tree to help people choose financial providers. NerdWallet has grown from there.
“We get paid for generating accounts for banks, for example if we referred someone to Chase for a Freedom card. We don’t get paid if they don’t have a marketing budget, and 90 percent of the cards on our site don’t pay us a referral fee.” Nor does the company get paid for people who do research there and then contact a card provider directly to open an account.
But it still seems to be doing pretty well; Chen said it has 2.5 million to 3 million unique monthly visitors. More than more than 26 million consumers visited the site for accessible tools, research and expert advice to guide their personal finance decisions, added Chen and the company is experiencing 150 percent growth year on year, he added.
Credit Karma started providing scores from Transunion and in December added scores from Equifax, updated weekly. Credit Karma does provide advice on how to improve your score or switch from a card debt to a lower cost personal loan from an online lender.
The company has 35 million members, said Christina Ra, director of public relations. When a user signs up and provides basic information — with no credit card required — Credit Karma pulls his or her credit information, provides a score, shows their credit utilization and suggests people who use only 30 percent or so of their credit capacity have a higher rating.
“We started with a score and then added a credit report based on the data pulled from your credit report,” said Ra, “and then we added a credit simulator to show what would happen if you opened a new card or closed an account. We are putting consumers back in control.”
The company has found that 50 percent of consumers have never…
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