Monday, October 4, 2010

Should You Use MINT?

Should you hand over the account numbers and passwords to all your bank accounts and credit cards to an online website?  Common sense would say " NO".  I say " NO" as well.

No, I am not talking about breath mints.  In a recent article on CNN Money (consider the source, and no, that's not a compliment, most of CNN Money is aimed at the idiot level) the former CEO of the ill-fated Wesabe talks about how great his former competitor MINT is.  No doubt they paid him to say all this stuff.  Nothing in life happens by accident.

Internet entrepreneurs are an interesting breed.  They live a monk-like existence, living on food stamps and bread and water, providing YOU the consumer with free services, so that you can make your life better.  No sacrifice for them is to great, so long as you have free online services!

Oh, wait, that's wrong.  They drive Ferraris and make millions of dollars off of YOU, the consumer, designing the "next big thing" that will separate a chump from his money.  Remember that, before you go online.

MINT offers to track your finances for free, and tell you where you can save money.  Sounds great, right?  Well, there is always a catch to these deals, and with MINT there are two HUGE catches.

First off, you have to grant them access to all your bank accounts and credit card accounts, including the user name (or account number) AND PASSWORD.  Now bear in mind that no other Internet financial transaction, other than with the bank or credit card company in question, will ask you for this data - legitimately.  Once you hand over the username and password to someone, they have access to your account and can drain it of all funds, if they chose to do so.  You have no control - or any way of tracking it.  So much as the bank is concerned, you are the one requesting the withdrawl or payment.

So if you hand over this data to MINT, and someone at MINT steals it, then they can take your money and the transaction is virtually untraceable.  You can never "prove" that somehow a data breach at MINT caused the money to be stolen.  And in fact, as far as anyone would know, it was you that took the money.  So if you have, say $100,000 in a money market account, and you give the access data to MINT, well, you just have to hope no one hacks their server or there are no disgruntled employees working there.

Handing over your financial access to someone is not something to take lightly - which leads us to our next point.  If this was to make any sense at all, there would have to be a COMPELLING reason to do so.  Many people are nervous about using the Internet for financial transactions as it is.  But there is a COMPELLING reason to bank online, pay your taxes online, balance your credit cards and bank accounts online and all the other financial dealings you can do online.

But getting a pie chart that tells you how much you are spending on eating out?  Not compelling.  You should be tracking this in Quickbooks or at least Quicken, anyway - by keeping your own, separate records of each of your transactions, even cash ones.  So why do you need MINT?

And more importantly, what does MINT get out of it?  What is their profit model?  Well, like so much of the Internet, it is marketing, and by that, I mean advertising.  The demographic gold mine that is your financial data can be spelunked and harvested to produce very valuable information - who you are, where you live, how old you are, and most importantly, how much you make and where you spend it.

MINT then offers to provide you with "special offers" to "save money".  Guess who the "special offers" are from?  You guessed it - advertisers.

Oh, but wait, you say, what about those great bargains and special offers?  Don't get too excited, because mostly it is just a referral site.  For example, if you click on "save on car insurance" it just lists a number of different car insurance sites with "click" links.  They tell me I can save a lot of dough if I switch to GEICO.  Thanks.  Been there, done that, two years ago, by going directly to the GEICO site.

Oh, but wait, they can save me money on my credit cards!  Click on the link and a list of credit card offers comes up, none with an interest rate lower than 10%.  I already have 6.75% with Citibank and 7.5% with Capital One.  And I found these by going directly to their sites.  If you are astute, you can find better "bargains" yourself online directly.

They have a link to "save" on your checking account!  For $10 a month, I can get "free checking" (??) at some bank I never heard of.  This is, of course, $10 more a month than I am spending at Bank of America for really free checking.

You'd have to be hemorrhaging cash to think any of these offers are "bargains."  Only an idiot would sign up for this.  And based on the pie chart shown in the opening screen shown above ("Rent: $1200") it would appear the target audience is younger people who do, in general, spend like idiots.

So you hand over the keys to the kingdom and get some superficial financial analysis and a boatload of SPAM and some links to some pretty crappy (at worst) or mediocre (at best) deals.

Sounds like a good deal to me!  I just love SPAM!  Oh, wait, I hate it, with a passion.  And I'm too stupid to find websites on the Internet without someone steering me to them.  Oh, wait, I'm not.  I know how to type a URL, thank you.

Yes, you should track your spending, but no, it is not hard to do.  Taking the "easy way out" with sites like MINT is risky, in my opinion, and their tracking and suggestions are little more that being advertised to and offered some pretty crappy deals.  Advertising is not the answer if you are struggling to save money.

Giving you a coupon for a discount on a restaurant meal is not the answer.  Not eating in restaurants all the time IS.  And you don't need MINT to tell you that.  Just stop using restaurants as your kitchen.

And so on, down the line.  Getting a "better deal" on a new car is not saving you money - hanging on to the old one you have is - or buying a late model secondhand car.

As I have noted before, all advertising is based on the simple premise of persuading a consumer to act in a manner that is NOT in their own financial best interest.  Consumers naturally gravitate toward financial decisions that make sense financially.  It is only the power of persuasion - heavy advertising - that causes consumers to think things like "Gee, leasing a new Lexus makes sense!" or "Dinner out at Applebees is good food and a good bargain!"

No one in their right mind would think such things unless pressured by advertisements.

So MINT sucks from every angle - they want not only personal data on you, but unlimited access to your bank accounts - something you would not dare give your own Mother!  And return, all you get is more bad normative cues - advertising for goods and services, which cause you to spend MORE, not less.

There are no easy answers out there in life.  Most of the "good stuff" in life is hard to do, which is what ultimately makes it more satisfying.  Walk away from easy answers.  Walk away from MINT.

Update:  December 2, 2010

Mint and Yodlee, the data-harvesting company, have parted ways, after Intuit bought Mint.

One of the reasons Mint used Yodlee was to harvest the data from you various checking, savings, and credit card accounts.  The idea is, all this data is so varied and complex and spread out, that you "need" Mint/Yodlee to harvest all of this for you.

But a better, safer, and simpler idea is to not have a lot of different accounts.  Americans have way too many credit cards - what for?  If you have more than two (one personal, one for business) ask yourself why.  And please, don't say "for the airline miles" as we've already been over that.

Credit cards suck, period.  They are dangerous and like having a loaded handgun around the house - or worse yet, stuffed in your pants with the safety off, so it will blow your balls off if you twitch.

Keep your finances simple, and you will have little or no trouble monitoring them or maintaining them.  Again, in any consumer transaction, the more complicated you can make a deal, the worse off it is for the consumer.  So if you have five or six credit cards, and multiple bank accounts, it is harder to keep track of payment due dates, bank fees, penalties, interest rates, etc.

Rather than ratchet up the complexity in your life MORE by resorting to MINT or some other data-aggregating website, why not just simplify your life instead.

Yea, I know, radical idea.  But I've managed to do it.