For this article I used social bookmarking websites Digg and Delicious to find hugely popular stories or content about finance topics such as mortgages, credit cards and loans. After all, what more boring topic could there be? Or so I thought…
The Credit Card Prank
Found on Digg and dugg 2440 times.
In this story the author sets out to find out if anyone ever really checks credit card signatures. When signing for purchases, all vendors are supposed to check that your signature matches the one on the back of your card. To this end he goes about making various purchases on his credit card and signing his name as a range of spurious alternatives ranging from the inane “my butt” to the brazen “NOT AUTHORIZED”
Since reading this I for one am quite glad that signing for credit and debit card purchases in the UK has now been almost entirely replaced with chip and pin
This is actually part two of a two part article, and is followed by a third article where the author makes several phone calls to his credit card supplier in order to test just how secure the common security features – in particular the use of your mother’s maiden name as a security question - of telephone banking really are. Although also of excellent quality, clearly these didn’t quite cut the grade with the social bookmarkers of this world (receiving just 9 and 6 Diggs, respectively).
Be Your Own Bank
Found on Delicious and saved by 1765 people.
Prosper is described as a “social lending” website, enabling anyone to sign up and become a mini bank of sorts by lending money to other users. The relatively high interest rates you can gain by lending money directly to other people compared to putting money into a savings account make this type of investment attractive for many people – with returns ranging from 8.05% to a whopping 28.50%!
A bit risky, you say? Well, no. Prosper and Zopa are both similar in that borrowers are rigorously screened to accept only those with a good credit history, meaning that the levels of bad debt experienced on the website are significantly lower than what banks may experience. Additionally, any money you decide to lend is spread out in many small packets across multiple borrowers, so even if one or two default on their repayments, your investment is never tied up in one users fortunes. Finally, borrowers are categorised by their individual credit history, with the more risky borrowers receiving finance at a higher interest rate.
Note, Prosper is essentially an American version of the UK’s Zopa. Returns on Zopa average 6.75% - lower than Prosper, but still significantly higher than the best savings account I could find on financial comparison website “The Motley Fool”.