7 Easy Ways To See If A Money App Is Safe To Use Before You Sign Up

Read this *before* you download that new money app.

There are so many money apps and financial services out there these days that it can be a little overwhelming for the average person to figure out if a particular company is right for you.

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As a personal finance writer and editor, I spend pretty much all day thinking about money — and I often need to research new apps and services. For me, the biggest questions are always: Would I feel safe using this? And are there potential negative consequences (for me or anyone else) as a result of using this?

To help you make decisions about money apps or other services, I wanted to share my process. Here's how I decide if a financial service, product, or app is something I'd feel good about using and recommending:

1. First things first, I go to the company's website and look for a contact phone number.

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Don't get me wrong — I truly hate talking on the phone! But the thing is, if you ever run into an issue with your account, getting a live person on the phone to help you is so much more reassuring than digging through help center articles or sending an email and hoping for a speedy response. 

If I'm going to give a company my cash, I need to know that I can reach someone if I ever need help. If there's no phone number, I'm out. 

2. Then, I look around for signs that the website is legit.

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The first thing I want to see is either "https" in the URL or a little lock in the address bar of my browser when I'm on the company's website. These things mean that there's a secure connection between my browser and the site. 

I also look for a privacy policy somewhere on the website and skim through it. (If there's no privacy policy, skip to #4.) Next, I do a quick overview of the company's social media to make sure it looks professional and well managed. I actually like to see social media reps responding to customers who share issues on their feed, even if they're just directing them to call the company. On the other hand, I see unanswered social media complaints as a red flag. 

3. Next, I'm looking at pricing, which raises different issues depending on the service:

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For a bank, that means fees. If I see monthly account fees or minimum balance fees, that's a no-go. I'm also very anti-overdraft fees. For US-based banks, I make sure they're FDIC-insured. This means that my deposits will be protected in case the bank fails. If you're outside the US, this list of deposit insurers can show you what to look for in a bank near you.

For budgeting tools, I strongly prefer free apps like Mint, though some subscription products offer robust tools that I would recommend to someone who wants to go really in depth with their budget. But generally, it doesn't make a lot of sense to me to spend money on budgeting when it can be done for free.

For credit cards, first I'm checking to see if there's an annual fee. I know in some situations, it can be worth it to pay an annual fee. But in general, I'm not a fan so I steer clear. I also look at the range of interest rates (aka APRs) for the card. Credit card interest can be a real budget-killer, so I like to see ranges that start in the low teens and are mostly below 20%. It's also helpful to scope out any introductory offers, like a 0% interest period or bonus cash back or points. 

For credit monitoring or credit building, I stick to free services because you can already access your credit reports for free once a year. When I look at these services, I really like to see strong educational materials that accurately teach users how to navigate the confusing world of credit. Finally, I look at how aggressively the site tries to sell users on credit card and personal loan offers. I don't mind seeing suggestions for cards I'm likely to qualify for, but if I see anything like, "Open credit card X to add Y points to your score," that's a) probably way too oversimplified, b) definitely too pushy, and c) 100% a red flag to me. 

For investing, I'm looking at trading fees, account minimums, and any ongoing account-related fees. I like to see minimal to zero fees, and I especially like accounts with no minimums that allow you to start investing with just a dollar. 

For everything else, I look for the cost and weigh it against the benefits. I ask myself, is this something that I can do or get for free? How much is this service worth to me? If it's free, what kinds of data are they getting from their users in return? Is that something I'm OK with? For example, I use a few shopping rewards apps. I know they gather data about me, and I'm OK with it — but I'm aware that others might not be. So when I cover those apps, I like to call that out so people can make their own decisions for their comfort.

4. If my spidey-sense starts to tell me that something seems off, I'll google things like "[company name] scam" and "is [company name] legit?"

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One of the most common red flags that sends me down a Google rabbit hole is sadly if the service is being heavily marketed to lower-income people or people with lower credit scores. Because traditional financial services often exclude these groups, sometimes the companies that do serve them can be pretty predatory (think payday loans) or even scammy. I'll also search this if something sounds a little too good to be true, if there's too little information on the website, or if the service seems overly confusing. 

5. Next, I read professional third-party reviews to get a better sense of what the company actually does.

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A lot of company websites are so slick and sparse that it's hard to find a lot of language explaining their product or service in detail. I like to check out professional reviews like the ones on Nerd Wallet, Investopedia, and Forbes to get an outsider's overview of all the pros and cons of a particular service. I also like to look companies up on Trustpilot and the Better Business Bureau to check their ratings.

6. If they have an app, I read a range of user reviews in the app store to look for common issues. If lots of reviews mention poor customer service, I won't use it.

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User reviews can be really eye opening. I like to read a handful of the best four- and five-star reviews, and as many of the one- and two-star reviews as possible. I do take reviews with a grain of salt, however. Sometimes, "bad" reviews aren't what they seem, and a surprising amount of one-star reviews seem like the writer meant to click five stars but made a mistake.

However, if I see more than a couple of reviews that mention having a tough time reaching anyone for help with a serious account issue, that's a no from me. I don't care how great the app works when everything is fine; if there's not at least decent customer support when something goes wrong, then I don't find them trustworthy.

7. Finally, I'll go to Reddit and search for threads about the company.

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I like to search in r/PersonalFinance in particular because many of the users there seem well informed, and the conversations are generally really helpful. Also, some companies have their own subreddits where users can talk about the product and even communicate with employees.

I often find Reddit threads comparing a handful of apps that do roughly the same thing, and it's really interesting to see what different people like and don't like in similar services. Sometimes looking up one company on Reddit leads me to a post where I learn about a similar but better option. Other times, my Reddit dives turn up customer service issues or other unexpected problems. Either way, I usually learn something new when I dig into the Reddit posts about a company. 

And there you have it. Once I've gone through these steps, I usually have a good idea of whether a financial service is trustworthy, useful, legitimate, and worth the cost. It might look like a lot of work, but I can usually do this research in about 30 minutes. Oh, and because I'm a gigantic nerd, I actually find this whole process kinda fun.

What do you look at when you're thinking about signing up for a financial service or downloading a money app? Share your tips in the comments!

And for more stories about life and money, check out the rest of our personal finance posts.