1 in 3 are paying for something they don't want or need

Are 'Grey Charges' Costing You?

by Bill Hardekopf

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Look closely at your monthly credit card statement. There may be a few surprises, namely small "grey charges" that can add up quickly.

These are fees that companies put on your credit card bill without clearly notifying you about what they are. These small charges are a hassle to deal with and easy to brush off, which is what the company wants you to do.

In 2012, there were an estimated 233 million grey charges, which cost consumers more than $14.3 billion, according to a recent study from BillGuard and the Aite Research Group. The average grey charge amounted to $61.

One in three cardholders is being charged for an unwanted service or product according to the report.

Over 40% of the grey charges come from free-to-paid fees, where a customer receives a product or service for a free trial and is then charged if they don't cancel the good or service within the specified timeframe. These charges are legal, as long as they are mentioned in their contracts. The next most common grey charge is where a consumer orders a product online, but is also charged for a second item they did not purchase.

The report identified eleven types of grey charges that are not properly disclosed to consumers. These include unknown subscriptions, recurring memberships, and automatic renewals.

You may not be able to completely avoid grey charges, but be aware of them and analyze your monthly bill. If you see something you do not recognize, contact the company associated with the charge and ask what it is. You may be able to save a lot of money just by keeping a closer eye on your debit and credit card accounts.

Here are some tips for controlling grey charges:

  1. Pay close attention to your monthly statement.
  2. Use credit cards instead of debit cards. Disputes are handled faster and easier with credit cards.
  3. Read the terms and conditions. Grey charges aren't advertised in the bold headlines, so read the fine print to know what you are signing up for.
  4. Don't provide your contact and personal information for free promotions.
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  6. Set a reminder on your calendar to cancel the product or service before the trial is over.
  7. If you have to remember to cancel it, you may not want to start it.
  8. Know how to dispute a charge on your account.

Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

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