I have a near OCD-level need to check my credit card statements.
On an almost daily basis, I look over the charges on the credit card my husband and I share and keep track of where our money is going.
For instance, several years ago I signed up for a free 30-day trial of Shoprunner in order to get a delivery fee waived. I canceled the subscription within a week—but still found that my credit card was charged $79 for a yearly subscription at the end of the 30-day period anyway. A quick phone call got the charge reversed, but it made me wonder how much money Shoprunner and its ilk earns each year off of people who have better things to do than keep an eagle eye on their statements.
According to a 2013 study by industry analysts Aite Group, consumers spend $14.3 billion on these charges each year. These ongoing fees, known in the industry as grey charges, account for 233 million transactions per year. The charges are legal, and prey on the fact that most people do not pay close attention to their statements. They also rely on consumer apathy, since even the credit and debit card users who discover grey charges often decide that the hassle of canceling outweighs the cost of paying the fees.
It is these grey charges that the startup Trim is hoping to eliminate. This program, co-founded by Yale graduates Thomas Smyth and Dan Petkevich, will track your subscriptions and allow you to easily cancel any you no longer want or need.
Here’s what you need to know about Trim (aka our Trim Review):
The Idea Behind Trim
Smyth and Petkevich each have impressive resumes. Smyth was an investor at Core Innovation Capital, which invests in finance tech companies like NerdWallet, CoverHound, and Ripple. Because of this experience, he spent a great deal of time thinking about personal finance.
One day, he and Petkevich, who are longtime friends, were comparing credit card statements and realized they were each still subscribed to a number of services that they no longer used, such as a subscription to the Wall Street Journal and a renter’s insurance policy for an apartment Petkevich had moved out of the previous year.
They decided that this widespread problem was something that could be solved with software, and so Trim was born.
How Trim Works
You start by creating a profile, and then linking a credit card or debit account, and you may add as many accounts as you need to. Trim analyzes your transaction history for the past 90 days to determine all of your subscriptions. The way it does this is fascinating:
Trim starts by identifying merchant names that it already knows use recurring payments, such Netflix and Experian. This can identify 98% of subscriptions instantly. From there, the system looks for recurring payments for the same amount of money to the same merchant, but it is able to identify and leave out recurring payments to merchants like coffee shops, since it recognizes your latte habit is not the same as a subscription.
Once the subscriptions have been identified, the program texts you the list and you have the option of texting back “Cancel _____” to cancel your subscription. Trim takes care of contacting the merchant on your behalf. Generally, that means they will send a template email, although they will make a phone call if necessary, or even send certified mail on your behalf to cancel things like old gym memberships that are notoriously difficult to wiggle out of.
The program was created solely as a web service on purpose, since they wanted the functionality of Trim to remain narrow and focused. Smyth and Petkevich worried that a mobile app might over-complicate the program. This does mean that you might need to re-link your account every once in a while in order to catch any new subscriptions, since the program only checks the previous 90 days. Unlike an app, it will not give you regular reminders.
The founders of Trim take security very seriously. They use the banking data API Plaid to securely connect to financial institutions. When you register, you will be asked to enter your online banking credentials, but those credentials never reach Trim’s servers, nor are they stored in any way. The credentials are sent to the bank, which sends an encrypted token with your transaction back to trim.
Trim also uses 256-bit SSL encryption for its website and all server-side databases. It will also ask you for two-factor authentication when you sign in on a new device.
Trim is completely 100% free. There is no cost whatsoever for users, and the program does not use or sell your data. Currently, the program is operating on the investments from a group of angel investors. In the future, Smyth and Petkevich hope to add a premium, high-touch financial advising service which will cover their operations. On their website, the founders promise that they will always offer a free plan.
The Bottom Line on Our Trim Review
Grey charges and subscriptions are a sneaky way for corporations to profit off of human nature. Trim’s mission to save people money by helping them to both identify and cancel unwanted subscriptions is a worthy goal, and it is especially admirable that they are committed to always offering their program for free.