These are my top recommended credit cards for this month. Some have $450-550 annual fees waived exclusively for US military personnel.
The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
Over the next few weeks I'm publishing the entirety of my free report on “How to Make Money with Lending Club” as blog posts, so you can access them without having to download the report. If you'd like to read everything ahead of time, go ahead and download the report today! Last week's topic was “What is Peer to Peer Lending?“
It began in January 2011. I had started my first “real” job after college 6 months earlier in June 2010. I was frustrated with the up and down returns of the stock market and looking for a way to expand my monthly cash flow.
Real estate in the area I was stationed was not an option, plus I knew I’d be moving within 18 months. Certificate of Deposits and savings account interest rates were abysmally low. None of these investment vehicles produced monthly payments or had a rate of return above 2%. Then I found Lending Club.
Lending Club is the New Kiva
The peer-to-peer lending concept was familiar to me from Kiva, another P2P lending site. Kiva is focused on charitable investments in businesses in the third world. This is commonly known as microfinance: loaning money to people who don’t have access to traditional financial institutions. People who need loans but can’t get them from banks or can’t get a reasonable interest rate apply for loans that are funded by people from around the world.
Most investors have only $25 in each loan, meaning that they have very little to lose on each defaulted loan. I knew the default rate for Kiva was as low as 1%. Could Lending Club provide similar low risk with high return potential?
At first, I was apprehensive. The returns seemed too good to be true.
- Who was borrowing money at such a high interest rate?
- What was the default rate like?
- How much data did the company have to backup that people would actually repay the loans?
All of the questions and more were clearly explained on the website. The transparency of the lending process and the amount of data available to the investor is fantastic. You can find lots of stats here. There’s even more data once you sign up for the service.
I’ve been investing in Lending Club now for over two years. In that time, I’ve only invested roughly $1100 into the service. Up until this year, I took a very lazy and uneducated approach to selecting which loans to invest in. Now I’m taking it much more seriously.
My Results After Three Years of Lending Club
After nearly three years of investing in Lending Club, here are my results. Remember, this was with almost no research and a very relaxed approach to selecting which loans were invested in. Had I taken more time to research, I’m sure my returns could have been much greater. I am now filtering much more aggressively and being very selective with the loans I invest in.
Loan Performance Summary – generated from NickelSteamroller.com
|Rate of Loss (Default/Charge Off)||5.36%|
|Total Lent||90 loans, $2,207|
|Net Gain||$136.25 (+-$10)|
|Markups Paid (secondary market)||$2|
|Average Loan Grade||C1|
|Average Interest Rate||14.89%|
|Average Loan Age||18.7 months|
A 6% return is not negligible, especially when there was no work done on my part, CD and savings accounts interest rates are so low, and this is an investment very uncorrelated to stock market or property value performance. In an era of low FDIC insured interest rates and an extremely volatile and possibly overpriced stock market, Lending Club offers just one more way to diversify your income and investments.
So how does Lending Club work? And, more importantly, how can you get it to work for you?
Tune in next week to see How Lending Club Works. If you can't wait, download the free report here now!
AMEX Platinum With NO Annual Fees for US Military
Military servicemembers and spouses can get the American Express Platinum with NO annual fees. Pick up your military annual fee waived card here!
The AMEX Platinum offers:
- $550 Annual Fee WAIVED for US Military (and spouses)!
- 60,000 Membership Rewards Points welcome offer
- $200 credit for Uber rides (or Uber Eats!) annually
- $200 airline fee credit
- Centurion Lounge and Priority Pass Airport Lounge Access
- NO foreign transaction fees
These benefits make it my top recommend card.
If you already have an AMEX Platinum card, check out the other AMEX cards, Chase credit cards, and this month's top recommended credit card bonuses, most with no annual fees for US military personnel.