Small, and seemingly innocuous, a gray credit card charge is a blanket term for minute charges on credit cards. If you suddenly find a massive charge on your card, you would most likely investigate. Conversely, if there is a small charge, like forgetting to cancel after a free trial or a nominal fee you did not agree to pay, you may not leap to investigate. At the time, it can seem like it is not worth the time to look into it, but these deceiving costs can build up significantly.
What Are Grey Credit Card Charges?
A term popularized due to the sneaky nature of the fees, gray credit card charges refer to small costs that add up over time. When you look at them individually, the fee can seem minute. Perhaps you signed up for a free trial and forgot to cancel, or a company tacks on a membership cost to which you didn’t actively agree.
The passive agreement gets used by subscription-based services to place recurring charges on your card after the original trial. Since many consumers don’t realize the card is about to be charged, it can lead to disgruntled shoppers. These often deceptive charges highlight the importance of auditing subscriptions and paying close attention to credit card charges (regardless of the amount).
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Types Of Gray Charges
There are different types of gray charges, and understanding how they apply to your lifestyle can go a long way to protecting your card balance and helping you save. Among the types of gray charges are:
Automatic Renewals
One of the most common types of gray charges, these fees come up when consumers are unaware that a service automatically renews after a contract is complete. Membership services may note a subscription term, but the fine print could detail an automatic renewal. You can address this issue by placing a note in your calendar to cancel the subscription prior to the renewal. Ensure that you read the fine print on any membership agreement.
Free Trial Costs
This is when a free trial converts to a paid plan without the company expressly informing you of when the free period ends. In some cases, the company also won’t inform the consumer of the amount charged. This can also happen when you agree to a subscription when making a separate checkout on a purchase. For instance, if you agree to the Uber Pass while making a purchase, the subscription continues after the initial free term.
Cancelled Subscription Costs
These fees are often the hardest to spot since they apply to subscriptions you already cancelled. Earning the name zombie charges, this is when the company (whether intentionally or accidentally) keeps charging you after you cancel the account. To address it, you can contact the company immediately and request a refund. Keep thorough records of your payments and communications to substantiate your cancellation.
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Subscriptions That Increase In Cost
This is when you agree to a price for either a product or service without knowing that it increases at regular intervals. The cost creeps up slowly, and can often be without the awareness (or agreement) of the cardholder. These are especially problematic, since the extra charge can be for a product or service you use, and thus may be less inclined to take note.
100% Money-Back Guarantee
When you get a money-back guarantee for the purchase of a product, it is subpar, and then you fail to return it. Your account will continue to get charged. This is increasingly common with modern payment options that let you make small payments over time. Your account will be charged until you return the item; and, in some cases, there is a limit on how long you have to make a return. Be sure to read the terms and conditions when you make a purchase.
Ghost Charges
When you buy something online, some companies deceivingly add a subscription at the same time. A popular example is purchasing an e-book and ending up with a subscription to a book service. In order to address this, when you make a purchase, keep a careful eye on the checkout page. The fee will likely show up as a single transaction, at least before a recurrent charge. It’s important to review the checkout page even when you make small purchases online.
How To Avoid Grey Credit Card Charges?
Prudent credit card management involves carefully monitoring your account and avoiding gray charges. In order to do this, some helpful steps to take include:
Regularly Review Your Credit Card Statement
This is the cardinal rule of any credit card account. Don’t wait until the end of the month to review transactions, especially if you shop with it frequently. Most cards have the option to look at your account digitally online, and routine check-ins let you see any gray charges as soon as they occur.
Read The Fine Print
Anytime you make a purchase or agreement, especially given the fast-paced nature of digital transactions, reading the fine print is essential. It is all too easy to simply check the terms and conditions box without reading it. However, this provides an opportunity for all sorts of gray charges to slip through the cracks. Taking an extra couple of minutes to read through the agreement can save you from a lot of issues down the road.
Use Your Credit Card Instead Of Your Debit Card
Whenever possible, use credit cards over other online checkout options. Some offer PayPal or Interac online, yet these types of services can make it more difficult to dispute charges down the road. If you make the payment with your credit card, you can transfer the funds from your chosen account online. It enables you to dispute the charges more easily since credit card companies have processes in place to address this type of issue.
Mark Your Calendar
This is a key step in preventing gray charges on your credit card. Any time you set up a free trial for something, mark in your calendar the day before it will renew. This gives you time to assess whether it is something with which you want to continue. As an extra planning measure, keep calendar notes on all of your upcoming payments, especially recurrent fees.
How To Get Rid Of A Grey Credit Card Charge?
If you discover a gray credit card charge on your account, there are measures you can take to get refunded for the charge.
Contact Merchant Responsible For Charge
The first step is to contact the merchant directly and dispute the charge. In many cases, it could be an accident or miscommunication. The merchant should be able to reverse a false charge.
Contact Your Credit Card Provider
If the merchant is not willing to cooperate, you can dispute the charge with your credit card company. Credit cards are meant to be secure modes of payment, so credit card companies have policies in place to accommodate these needs. Basically, the rules mean the account holder is not held liable for a purchase they did not make. In the best-case scenario, you can use this information to get the merchant to issue a refund.
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Are Grey Credit Card Charges A Problem In Canada?
The nature of gray credit card charges is that they are sneaky and small. Most households don’t thoroughly check their statements every month. This means a small difference between expected balance and reality may go unnoticed. It can result in the charges staying on the account, and regular charges continuing, for a long period. Not only do the charges add up, but they can also accrue interest if your balance isn’t paid in full.
Some companies use the knowledge that consumers don’t always pay close attention to their credit accounts to make these charges. It can be difficult to recuperate the funds after the fact, and many businesses make it cumbersome to cancel your account. To avoid this, check your credit card statement regularly, always read the fine print, and schedule your free trial dates every time you sign up.
Grey Credit Card Charges Canada FAQs
Can I dispute a credit card charge that I willingly paid for?
What are the most common gray credit card charges?
How do I know if I have gray credit card charges?
Are gray credit card charges illegal?
Final Notes
Ensuring that your credit card statements accurately represent your spending is paramount to your financial security. The best way to avoid issues is to keep track of spending as you go. Take note of any subscription-based trials you pursue, along with any purchases made throughout the month. At the end of that period, you can review your statement closely. If there is an issue, regardless of how small the charge, identify the source. From there, you can take steps to recuperate the funds and cancel the charge.
Of course, the ideal course of action is preventative. Before you agree to any purchase (whether in person or online), be sure that you read the fine print. Responsible credit card management can prevent gray charges, and quickly address any that you incur.
