My Five Favorite Financial Products

For regular readers, my love of the following five financial products won’t come as a surprise, but I realized that I have never written a single post about the handful of financial products that I love… and why I love them. The fact is, the following five products are not only highly valuable, four out of five of them are free, and all (I believe) are especially useful to us twentysomethings.

#1. ING Electric Orange Checking

I’ve had an ING Direct Orange Savings Account for several years now. Although their savings interest rate now lags other online savings accounts, I have fallen in love with the ING Electric Orange checking account. I admit, I signed up for Electric Orange more out of curiosity than a desire for a second checking account. Since then, however, I’ve found it to be a convenient way to segregate money designated for retirement savings, tax payments, and other savings. I earn interest on the checking balance, can transfer money between my Orange Savings and other checking accounts online, and have a debit card that can be used free at thousands of ATMs in convenient locations. The only downside that I’ve found to a virtual checking account is there’s no way to deposit cash to the account. Learn more about the ING Direct Electric Orange checking account.

#2. Quicken Online

Quicken Online provides simple, powerful, and free online spending tracking. It automatically links your bank accounts and has a trends feature that lets you get a visual view of your income and spending over any period of time you choose. Plus, did I mention it’s free? Learn more about Quicken Online.

Why not Mint.com? A lot of my readers say they prefer Mint.com to Quicken. Personally, I’ve found Quicken easier to use. I like that it provides everything I want and nothing I don’t. But it’s an individual choice. I recommend trying them both and sticking with the one that works for you.

#3. Credit Karma

CreditKarma is a totally free service launched last year that allows you to view and track an estimate of your credit score. Although a CreditKarma score is not an actual credit score, rather a projected score based upon your TransUnion credit report, it’s the only way to get a truly free picture of your credit score. (Annualcreditreport.com provides free access to each of your three credit reports once a year, but does not provide scores. Other services either charge for your score or provide a free score only if you subscribe to and then cancel a monthly credit monitoring service).

CreditKarma also lets you compare your estimated credit score to the national average and to people in your age group and state. It also provides a credit report card that rates your credit on various factors, and a credit estimator that lets you see how making certain changes (like paying down credit card balances or paying a bill late) might impact your credit score.

#4. Lending Club

Lending Club is a social lending network that lets regular people invest in loans to others. If you have good credit and need a loan to consolidate high-interest debt, pay for education or training, or help fund a business, Lending Club may offer better rates and/or a higher chance of approval than a bank. If you’re an investor looking to get better returns than a certificate of deposit, you can create a loan portfolio on Lending Club that could earn you a 7% or higher annual return. Read more in my Lending Club review.

#5. American Express Charge Cards

I love American Express charge cards (charge cards, not credit cards). This last one is a bit controversial because these cards charge fairly hefty annual fees ($95 for the basic card, $125 for the gold card, much more for a platinum card) and a lot of people say “why pay an annual fee for a credit card when so many are free?” Well, the reason both my fiancée and I pay these fees is because with these charge cards we have to pay the balance in full every month—they are not credit cards that allow you to carry a balance.

Others say “why not just use a debit card?” Because using an AMEX card comes with an additional level of protection from fraud and disputed transactions plus it helps build and maintain good credit, just like a credit card–two things debit cards don’t do. These charge cards also pay rewards points for purchases which, most of the time, lets us earn back what we pay in annual fees. Learn more about the American Express Gold Card or Platinum Card.

Editor’s Note

Thanks to Darwin’s Finance for hosting this week’s Carnival of Personal Finance, which included my post We All Have Spending Weaknesses.

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Live for Improvement 7 July 2009 at 11:49 am permalink

Thank you for the recap on some good financial tools. I am going to check out Credit Karma now, it sounds interesting.

-Dan Malone-

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NoBankHere 7 July 2009 at 3:00 pm permalink

i use 3 of the 5 products you mentioned here… All 3 are very revolutionary products that add value beyond your conventional products.
I love CreditKarma. They made credit score tracking as easy as checking your social networks. Love it.
LendingClub is rad! i can’t believe I’m making 8% after a full year. Investing in other people’s loans makes complete sense. Why earn 2% at the bank (at most) when you can decide who gets your money and earn 8-10%?
And ING electric orange is really da bomb! I love how they added unique features that you won’t get at other banks.

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Scott Lovingood 7 July 2009 at 3:13 pm permalink

I love CreditKarma. I think it is probably the coolest tool you mention.

I use quickbooks because of my business but agree that some type of accounting system is needed for everyone.

I still use a credit card with no fees. I pay off the balance every month and get cash back as well.

I have looked at Ing but just not taken the time to move my accounts. I do need the ability to deposit cash at times though which makes it a less than perfect answer.

My experiences with Prosper were not good so I have stayed away from Lendingclub. I do have a private loan to a local business at 9% though which is similar but in this case, I know the owners, know the business and have a good idea of the success they have had.

Maybe someone needs to create a lending club just for business that goes to a higher limit than 25,000. That may be good for a small start up but many companies today are looking for larger amounts of capital.

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M.Wanzer 9 July 2009 at 11:56 am permalink

I have still been pretty skeptical of the whole online money management. I signed up for Yodalee (spelling?) once and I liked it, even though some of my accounts were with institutions (mainly credit unions) that weren’t compatiable with their framework. My main concerin is security. I am a software developer and I know what most developers know, no system is TRULY secure, having all of my account numbers, pin numbers, online passwords, etc, stored in one location that I have absolutely no control over just rubs me the wrong way.

The charge card sounds good, but I still don’t know about the fee. I mean there are cards out there that offer rewards and don’t charge a fee, but you do have to have a lot of discipline to pay them off without going into crazy debt.

I really want to investigate that Lending Club one though, that sounds pretty cool

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