Credit Card Grey Charges and 3 Ways to Stop Them

If you don’t go over your credit card statement with a fine tooth comb, you could be paying hundreds of dollars in extra charges without even knowing it. Each month thousands of people are falling victim to “grey charge”s on their credit card. There are an estimated 233 million grey charge a year, totaling $14.3 U.S. billion, according to a 2013 Aite Group report.

What are Grey Charges?

Grey charges are credit card fees paid for unwanted subscriptions billed on a recurring basis. They’re called “grey charges” because although they are legal, they lie in a morally grey area. While you do technically agree to pay these charges when you sign up for a new subscription, these companies are hoping that you forget to cancel these unwanted charges and are continually billed. Essentially, they want to keep you on the hook.

Grey charges come in many shapes and sizes. The most common grey charge is free-to-paid. This is when you’re given a free introductory period that eventually turns into a paid subscription if you forget to cancel by a specific deadline. For example, you may sign up for a magazine offered as a free trial and forget to cancel. There are over 115 million free-to-paid transactions a year, adding up to over $6 billion, according to Aite Group.

Other types of grey charges include “phantoms” and “zombies.” Phantoms are extra products and services added onto another transaction. While fans of the zombie apocalypse will get a laugh out of the term “zombie” grey charge, in reality it’s no laughing matter. Zombies are subscription fees continually billed to you even after cancellation.

Don’t think grey charges are worth your time? Think again. The average grey charge amounts to $61 per credit card bill, according to Aite Group. Even a charge of $10 per month adds up to $120 per year and a whopping $600 after five years.

How to Stop Grey Charges

Here are three easy ways you can fight back against grey charges.

1. Stop Signing Up for Stuff You Don’t Need

The easiest way to stop grey charges on your credit card is to not buy or sign up for products or services you don’t really need. For example, you might get an offer for a free magazine subscription trial in the mail, but if you already have magazines piling up on your coffee table, do you really need another?

2. Read the Fine Print

As a consumer, not only is it important, it’s your responsibility to read the fine print. Unscrupulous companies will often put hidden charges in the fine print. For example, if you get an offer for a free magazine subscription, while the word “free” may be in large font, chances are the part about you continually being billed is hidden in small font. If you took the time to review the fine print, you wouldn’t be caught off guard when charges start appearing on your credit card statement.

3. Review Your Credit Card Statement

We all live busy, hectic lives, but that’s no excuse for not taking five minutes to review your credit card statement. You work hard for your money – do you think it’s fair companies are billing you for products and services you’re not using or don’t want or need? If you’re in the bad habit of only reviewing your statement for big charges or only looking at the total amount, stop! Grey charges can really add up fast. Review your statement line by line. If you don’t recognize a charge, you should question it.