Automatic payments can be a double-edged sword. If used correctly, they can improve your credit score, and they’re a great way to avoid late fees and give you peace of mind that your bills are paid on time, every time. However, signing up for subscriptions that come out of your bank account automatically each month is also a great way to waste your money, if you stop using those services and forget to cancel your membership. You could do all the heavy lifting to cancel those withdrawals on your own, but one company wants to do the work for you instead.
Even the most financially-conscious people can fall prey to sneaky automatic payments without realizing it. That’s what Thomas Smyth and Daniel Petkevich, the founders of Trim, discovered when they took a close look at their own credit card bills and bank statements. Both had worked in fields related to financial technology, and yet even they were paying for services like Hulu that went unused, or still paying renter’s insurance fees on an apartment that was vacated months ago.
You might be meaning to cancel your Spotify Premium subscription and just haven’t gotten around to it, or you’re missing that Experian charge for credit reports you’re not accessing. You might even have a pretty good handle on your finances, but if you’ve been using the same credit cards and bank accounts for several years, some excess charges could be going unnoticed, costing you hundreds of extra dollars each year. But your time is valuable, and you probably don’t feel like sitting on hold for 20 minutes with five different companies just to cancel a membership.
In fact, credit reporting agencies in particular use that tactic to keep people from cancelling. If you call to get rid of the service, chances are you’ll be put on hold until you give up and decide to try another day. In the meantime, you get charged for another billing cycle. “It just feels unconscionable,” Smyth said in an interview.
With Trim, Smyth and Petkevich hope to take that responsibility off your plate. When you sign up for Trim – a completely free service, with no data sharing or hidden fees – you’ll provide your name, email, phone number, and online banking credentials. (You can also elect to add credit or debit card information.) Trim will then send you a text message with all of the recurring charges on your credit card statements and bank accounts. Sure, they’ll find the Netflix subscription you want to keep, but they might also turn up charges you didn’t even realize were getting deducted from your account each month.
How it works
The magic is in the algorithms built into Trim’s system. First, it will take a look at your accounts and identify merchants who often charge recurring membership fees, like Netflix, Experian, The New York Times, and so on. That first step is able to identify about 98% of your recurring charges, Trim says on its FAQ page. Second, the site then examines your accounts for recurring charges of the same amount and from the same merchant to shake out the remaining charges. It’s even smart enough to ignore charges from merchants like coffee shops, so if you buy the same priced Starbucks coffee once a week, it won’t bother you with that.
If Trim finds charges you don’t want anymore, you’ll authorize Trim to cancel them by texting back “Cancel _____.” Trim will then send an email template to that company requesting the cancellation, occasionally following that up with a required phone call or other form of contact. (Old gym memberships to Planet Fitness, for example, sometimes require written confirmation of the cancellation.) According to The New York Times, 35.8% of users cancelled their Experian charges, followed by high cancellation rates for gyms and Gogo Air, the primary Internet provider in airports.
Trim does all this with bank-level security to protect any information you provide, and explains on its site how it gains access to your financial records. It won’t take a commission off any savings it provides to you, and you don’t have to pay for ongoing services. “What we do now is all software,” Smyth explained. “It doesn’t really make sense to charge people for something that doesn’t cost us something.” Eventually, the site plans to offer a premium (paid) financial advising service, but promises it will always offer the basic services at no cost.
Before that step, however, Smyth said they want to show a growing base of people that a service like Trim can actually get rid of some of the fat on your monthly statements. “The key for us is going to be showing people we can actually save them money,” he said.
Trim won’t solve all of your financial charges. Some companies, including LifeLock and others related to your financial data or identity protection, require the actual account holder to cancel the membership. They might also require data like your social security number or your mother’s maiden name to make account changes – information Trim doesn’t collect. “All that stuff, it’s really private stuff,” Smyth said. “We just don’t feel like we should be in the business of taking a lot of information that we don’t need to.” Others like Dropbox might ask you to move files out of Dropbox so you don’t lose them before cancelling the subscription.
And then of course there’s the recurring payments that aren’t quite as discretionary, like student loan payments, car insurance bills, and even your cell phone or cable charges. The texts you receive for your months charges are listed from the lowest to the highest costs, often meaning these payments show up in the bottom half. Eventually, Smyth said it’s a goal to see if Trim can help to at least lower some of those charges, though that’s obviously more time-intensive and complicated that simply sending Netflix an email to stop a subscription. It’s a goal for the future of the company, but goals like that are at least several months away, Smyth said.
You don’t have to ask another company to handle these actions – a thorough check on your own might alert you to payments you don’t need to make anymore. But if you don’t want to deal with the hassle of cancelling your own list, Trim might be the platform to use instead.