Question: How does Billshrink work?
Peter Pham: So far today we have a couple things. One is Billshrink lets you save money on your wireless cell phone plan. What we found is about 80 percent of Americans overpay for their cell phone bill. On average it's about $300 a year, so it's about $25 a month that most people are overpaying on their cell phone. That's just a function of mostly confusing products and kind of services that are out there; it's really hard to understand what you're getting and more importantly what you're actually utilizing. I don't know if you've flipped through a cell phone bill lately; it's a pretty complicated and most people are really, really scared of overages so they typically tend to overpay and buy more than they actually need.
So that's one. Two is credit cards. Credit cards are very popular on our website as well. A lot of people have the same credit card since college or their first credit card, 10 years later, 15 years later, without recognizing the fact that putting a different credit card and a better credit card in their wallet can save them up to a $1,000 a year or in the case of people who actually pay off their credit card every month it can actually pay you an extra $1,000 a month and getting you better points and bonuses and the way you earn a reward, the program.
Gas prices are the third thing we have and that's just a function of where you live and where you work. What we do is route that commute, between point A and point B, and find every single gas station along that routes including figuring out what kind of car you drive to look at your gas mileage, so that you can understand whether or not it's worth driving out of your way.
The last one was actually topical, which is savings accounts. We actually launched a tool on our site that allows people to find the right savings accounts and CD based on your needs. So how much money do you have, how much are you putting away every month, how much do you need access to. What kind of features? Do you need check writing or direct deposit? We actually converged over 100,000 ATM locations so that we can figure out locally which banking product's right for you and which ones to keep liquid and illiquid versus savings and CDs.
Question: How does the credit card portion of the website work?
Peter Pham: It starts with a few simple questions. So do you pay off your credit card every month? Yes or no. If it's a no, it's really how much you owe, how much you are spending every month, and how much you are paying off. The way we look at it is let's try to find you a credit card that's going to cost you the least amount of money. Of course if you're not paying off your credit card every month there is some sort of interest rates and maybe even fees if you're paying late -- making late payments. So our perspective is to find you a card that's right for your spending patterns. If you do pay off your credit card every month, it's where do you spend most of your money, how much are you spending, what's your credit and what type of lifestyle do you have in terms of how do you want to redeem. Do you want airfare, hotels? Are you a Continental or United frequent flyer? Do you only stay in Hiltons or Hyatts or Starwoods? Do you want cash back?
Those are the type of things that we look at. What we did was we calculated all the reward programs that exist over hundreds of different credit cards and broken it down to very simple terms and dollar amounts so that every person can then simply understand what the value of a credit card is based on their actual spending patterns.
Recorded on November 4, 2009