Credit Cards

The Most Common Hidden Credit Card Charges

Comments 0 Comments

If you don’t check your credit card statement every month, you may be racking up hidden credit card charges without even realizing it.

According to a study released last month from software company BillGuard and research firm Aite Group, there are roughly 233 million hidden credit card charges each year.

Of about 5,000 participants in the study, 35% were affected by hidden charges, and the costs associated with them were an estimated $14.3 billion in 2012 alone. Billguard’s software is designed to identify what they’ve named “grey charges.”

Here are the biggest hidden drains on your wallet, according to the study:

1. Free-to-Paid

Free-to-paid charges take the top spot by a landslide, racking up 115,200,000 transactions annually. This grey charge occurs when a consumer receives goods or services free during a trial period, but doesn’t actively cancel the service, resulting in a charge at the end of the trial. These kinds of charges rack up $6.135 billion annually for retailers, at an average of $53 per charge found in the study.

2. Phantom

Have you ever bought anything, only to receive an added bonus, perhaps a different product or service than what you intended to buy? That offer may come from a completely different seller, and could result in a phantom charge. Phantom charges make up the second largest “grey charge” category in both transaction and value, with 42.6 million separate occurrences resulting in nearly $2.6 billion annually.

3. Unintended Subscription

Unintended subscription fees are just what they sound like. Oftentimes when a consumer completes a transaction, they believe it’s just a one-time payment. But when that one-time sale turns into an unwanted, ongoing subscription, the fees can really add up. Unintended subscription charges come in third in transactions, with 15.4 million annually, but fifth in dollar value, racking up $707 million each year.

4. Zombie

The bane of any sane consumer, the zombie charge is a charge that just won’t quit. If you’ve ever had a subscription service that you’ve canceled over and over again, to see that charge continue to pop up, then you understand the frustration of a zombie charge. Zombie charges are fourth in occurrences, with 11.9 million each year, costing an annual total of $826.6 million.

5. Service and Luxury Fees

The fifth largest category of “grey charges” is that of service and luxury fees, which are often charged without a consumer even realizing what’s happening. Perhaps you’re paying for a special kind of card, to process a particular request, or even just for the privilege of a service. These charges happen 7.7 millions times per year, but each instance is a bit more costly than the other types of charges. By monetary value, service and luxury fees rank third, costing consumers $997.9 million each year. In the study, these charges cost individual consumers an average of $129.

These charges are spread throughout all credit card companies and all cardholders, and technically, they’re legal. So be vigilant in checking your statements frequently, know the terms of service before signing up for any free trials, and be persistent in reporting and pursuing unknown charges. You’ll save yourself quite a bit of money if you do.

Image: iStockphoto

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Find out where you stand.
Get your FREE personalized credit report card.

Sign Up Now
X

Stay Connected to Our Experts

Please submit your email address to get credit & money tips & advice
from our team of 30+ experts, delivered weekly to your inbox.