Hundreds of Consumerism Commentary readers have written in to this website to complain about FreeCreditReport.com. Many customers believed they were signing up for a free service, but the fine print indicated that accessing one’s credit report for free led to automatic credit card charges that were difficult to reverse.
A new service promises to monitor your credit card statements to spot charges like these, in addition to often-missed expenses like automatic magazine renewals (which often come at a higher price than the first year discounted price) and other surprise fees. If you’re willing to provide your banking online access information — your user name and password — to a third-party website, you can delegate monitoring your statements for tricky items.
BillGuard takes your account information and, like Mint.com, will be able to see your account balances and activity but will not be able to make any changes to your account, including transfer money or updating your personal information. BillGuard analyzes each line item against an algorithm based on user feedback that will rate and color-code each transaction (green, yellow, and red) to bring your attention to potentially unwanted charges.
(The graphic to the right is a sample report; apparently who ever designed this lives near me and frequents the same Chinese food take-out establishment as I do.)
Finding time to review every line of a credit card statement can be a pain. Tools like Quicken make this easier, but many people just don’t want to go to the trouble to review, much less reconcile, their spending activity. Outsource your financial review to a site like BillGuard, and it might be easier to get into the habit of ignoring your finances unless BillGuard decides to apply a red flag to a transaction. There are times when it’s good to have a hands-off attitude, but if you’re in danger of finding unexpected fees and surprise charges because you enter your credit card information online for free trials and answer calls for subscriptions of various types, you would be better served by reviewing your finances yourself.
For some, providing yet another unrelated company with access credentials for your financial accounts is enough to cause concern about security. This is now an industry-standard practice, but you should always take care to evaluate the risk before handing over your usernames and passwords.
Published or updated June 2, 2011.