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APR on my credit card is now 2,599% (Mint says)

Just received this email from Mint, the online tool I use to track my expenses. This is clearly a glitch on their part but I really find it funny in the light of all the talks about banks jacking up fees anticipating the new credit card regulations.

mint-fail

Chase, Mint viability, and web scraping

Chase VerificationIt is interesting how much attention this small company captured over the past week. Search for mint money management on Google and you get almost 2 million results. I made my own contribution just yesterday where I was questioning the viability of this service. Using web scraping for obtaining financial data is one of the problems.

Web scraping is a technique that allows web services (often called web bots) to take web pages apart and filter out information, banking transactions in this case. My understanding is that when Yodlee is doing it on Mint’s behalf, the banks don’t necessarily know their pages are being scraped. (more on web scraping from Wikipedia)

I gave it some more thought today and I think I know why Mint (and Yodlee) are having problems fetching Chase credit card transactions. If you have an account with Chase, you probably noticed the extra layer of security Chase introduced recently. Now every time you access your account from a new computer/browser you have to confirm that this is a trusted location by entering a verification code they send to your e-mail or cell phone. Since Mint (Yodlee) has to login to your account before they can scrap transactions from the web pages, they have to go through the same verification process as you do and since they have no access to your email they obviously can’t pass it.

The bottom line is, Mint will continue having these issues unless Yodlee is able to strike a deal with Chase (and other banks in the future) to allow them retrieve your transactions through other means or passing around this extra security verification. Is it likely? I don’t know but from my own experience I can tell you a lot about how slow and self-protecting large corporations are.

This situation probably puts Mint in very uncomfortable position at very inconvenient time. It is ironic how life of a startup can depend on such a seemingly small thing. Web scraping has always been a shady business and I am surprised that Yodlee has gone with it so far.

Related: Web 3.0: When Web Sites Become Web Services from ReadWriteWeb

Free online money management with Mint

Mint LogoI have been following Mint ever since Noah Kagan tipped me back in April about a new startup he was working for. Last week Mint won TechCrunch40’s top company award which encouraged me to write this review.

Understanding where your money is spent is the most fundamental thing related to personal money management. Such biggies as Quicken and Microsoft made fortunes selling personal finance software. Mint comes for free and yet it provides just as much information as you need to get the idea where you stand and where you go as far as your finances are concerned.

First impressions

My last and only attempt to introduce personal finance software into my money management routine turned out a total disaster. To input data I was forced to download data files from my bank which MS Money would then process. After that I had to go through most of the transactions and properly categorize them which is a major nuisance. To aggravate the experience I encountered problems with how MS Money handles transfers between sub-accounts, which I wasn’t able to resolve and hence gave up my experiments.

The founders of Mint were certainly aware of these issues when they designed the tool. Setting up my bank accounts and downloading financial data at Mint was a snap and while I still can’t get transactions data for my Chase credit card (pending resolution of this bug) I did so successfully for the rest of my accounts within just a few minutes.

Transactions are categorized automatically as they arrive (Mint servers retrieve them for you overnight) and for the most part Mint is correct detecting the type of expense which leaves your with just an occasional transaction here and there that you have to fix manually. To simplify the process of correcting Mint’s errors you can create rules to assign periodic transactions specific categories based on name. While you can’t create your own categories, the list of predefined ones is pretty comprehensive and should satisfy most people.

Mint Categories

Fancy charts

Heavy use of JavaScript, AJAX and Flash is what you will find with Mint. The combination however is neatly put together and I couldn’t find any major usability issues so far. You have buttons and links exactly where you expect them to be (alright, except for the close icon which is for some reason at the window top-left corner). There are minor bugs here and there (transactions page doesn’t alway refresh when clicking on the account tab, sorting transactions only works on the first page of the list) however I expect these to be worked out soon. It is in beta after all.

In the core of application is ability to see your spending habits which comes in a form of a set of charts. You can see a snapshot of your spendings for a chosen period of time as well as historic spendings trend for a few major categories. You can zoom into each category on the pie which brings up a nested chart with subcategories, very neat.

Mint Food

Business model

The “Ways to Save” tab is where Mint hides its entire business model. The website is designed to analyze your spending habits and give you smart financial recommendations on how you can improve your bottom line. Bad for Mint, none of the offers they gave me really worked. Here they are:

  • Mint detected that I paid $197 to Verizon and $9.99 to Yahoo this month and offered to move to Verizon Total Freedom plan for $145 per month. The $197 expense was due to going over limit last month (I mentioned it in my last post) and is a one time charge. Yahoo wasn’t an internet expense at all but rather an annual domain name expense. - failed
  • Mint looked at my Dividend World MasterCard from Citibank and offered to switch to Driver’s Edge Platinum Select citing potential earning of $240 per year in cash rebate. My current credit card already offers decent cash rebate which Mint failed to recognize (the benefit was quoted as “unknown”). - failed

The last offer from Mint was to switch from Citibank to ING which would pay me 4% interest on funds in my checking account. This is the only offer that has some merit but as usual there is a catch. When you make a move like that, the interest on checking is only one of the factors you should consider. What makes me stay at Citi is the convenience of a local branch, powerful online bill pay interface, and accessibility of my funds worldwide. Since this offer is based on just one factor it looks somewhat single-sided to me.

Mint Screenshot

What could go wrong?

Money saving recommendations aside, overall I am impressed with the easiness of the tool and when all kinks are worked out it is certainly going to be a killer application. Before it does however there are a few major issues that have to be resolved, and these have nothing to do with Mint’s user interface bugs.

Problem 1. To collect the transactions data, Mint screen-scrapes banks’ websites which it does by contracting a company called Yodlee. Having myself built a service that does some web scraping, I can tell you how unreliable the technique is. Mint is doomed to have blackouts whenever banks update web pages with transactions. Mint however is not your bank but rather a tool for financial analysis and as such might survive just fine if these problems are not frequent and limited to a day or two.

Problem 2. To set up your banking and credit card accounts with Mint you will need to enter login credentials for each of these financial institutions into Mint. Mint doesn’t actually keep this information, they forward it to Yodlee who then simply sends Mint a daily summary of customer’s banking activity. Just this week I received a letter from Ameritrade about a data breach. Imagine what happens if someone breaks into Yodlee’s servers?

What personal money management software do you use? Are you happy with it? Do you think Mint has a chance to survive when the big guys like Quicken start rolling out online editions of their tools?

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