Checking your credit card statements regularly can help you weed out recurring charges that are costing you money.
Recurring charges to your credit card can add up quickly, even if they’re small amounts. These recurring credit charges, sometimes known as gray charges, show up on your statement monthly, biannually or annually, often as a result of automatic billing. Knowing how to spot these charges – and eliminate them – can help you sidestep an overinflated credit card bill.
What Are Recurring Credit Card Charges?
Normally when you use your credit card to make a purchase, it’s a one-time deal. You swipe or tap your card at the checkout, or enter your details when shopping online, and that’s it. A one-time charge shows up for the purchase on your next card statement.
Recurring credit card charges, on the other hand, are charges that come back again and again. They can be larger charges, but most often, they’re smaller costs that you don’t necessarily notice unless you’re carefully going over your statements each month.
Gray charges are a type of recurring charge that’s associated with hidden fees, automatic renewals or increasing service fees for things you regularly pay for. The “gray” comes from the under-the-radar nature of these costs; they can sometimes be the result of sneaky or even fraudulent tactics used by the company that’s charging you.
How Do Recurring Charges End Up On Your Credit Card?
The kinds of things you could be paying for without even realizing it is lengthy, and many times these charges are the result of simple oversight on your part. For instance, you may end up with recurring charges on your card if you:
- Fail to cancel a subscription service before a free trial period ends.
- Forget to cancel subscriptions for streaming services you no longer use.
- Forget about automatic renewals that charge your card biannually or annually.
- Don’t get confirmation that a subscription has in fact been canceled.
When you’re not diligent about keeping up with recurring charges, it can be easy for something to slip through the cracks. But there are situations where recurring charges could be more than just a simple mistake.
For example, you might buy something with your card and the merchant doesn’t tell you about hidden or ongoing fees associated with the purchase. A company may automatically upgrade your subscription tier, or use false advertising to hide a monthly membership charge in what looks like a one-time service.
Small Recurring Charges Can Add Up to Big Financial Headaches
Unless you’re aware that you’re paying for products or services you actually use, they’re just a drain on your bottom line.
“You shouldn’t be paying for something you don’t want or know you’re receiving,” says Jared Weitz, CEO of online lender United Capital Source. “These gray credit card fees add up and can cost consumers hundreds of dollars per year; it’s money you’re throwing away that could be otherwise invested or saved.”
Spending money on anything unnecessarily can throw a wrench into your budget or hinder your efforts to keep credit card debt to a minimum. If you carry a balance from month to month, you’re not only paying for recurring charges, but you’re also paying interest on them.
But there is a bright spot to gray charges on your credit card: better on your credit card than a debit card. On a debit card, an unexpected gray charge is deducted immediately out of your checking account. With a credit card, you have a grace period to spot the charge and potentially get it removed before you have to pay for it.
How to Spot and Cancel Recurring Credit Card Charges
The easiest and best way to find recurring charges on your credit card is to carefully review your credit card statements.
“Check your credit card statement every single month, but don’t just look at the balance,” says Erik Skjodt, co-founder and CEO of personal finance app Budge Money. “Make sure to skim through each transaction twice, as it should be pretty obvious to notice charges you don’t want if you’re proactive.”
As you review your statements, you’re looking for charges you don’t remember agreeing to or charges that you thought had been canceled. But don’t gloss over charges you recognize, assuming that they haven’t changed, says Weitz. If you signed up for a $15 a month streaming service, for instance, make sure that you’re still paying that same amount every month and that there hasn’t been any fee creep.
If you spot a fee that you don’t remember agreeing to, get in touch with the biller to cancel first. Explain that you weren’t aware of any recurring charges and that you don’t want to continue paying. If the biller objects to cancellation or refuses to refund anything it has charged to date, reach out to your credit card company to dispute those charges, Skjodt says. Your issuer may reverse the charge and credit the amount back to your account if you can prove that you didn’t consent to the charges on a recurring basis.
How to Avoid Recurring Charges to Your Card Going Forward
Once you’ve cleaned up those gray charges, vigilance – plus a few tools – can help you dodge them in the future. Consider using these tips to eliminate the possibility of getting hit with recurring fees:
- Use calendar reminders. If you sign up for a free trial period or a service that renews biannually or annually, set up a calendar alert a few weeks, then a few days, before the renewal date so you have time to cancel if necessary.
- Read the fine print before sharing credit card details. Before signing up for seemingly free services or products, check the terms and conditions carefully. If there are any recurring fees that you’ll be charged, those should be clearly outlined.
- Watch out for reactivation or penalty fees. You may be charged a penalty fee for canceling a service or membership early, such as a cellphone contract or gym membership. And you might be charged a reactivation fee if you cancel a subscription service, then decide to sign up again in the future.
- Get confirmation when you cancel. If you cancel any type of recurring charge, ask for written confirmation that your account has been canceled and keep it for your records in case you’re charged again.
- Set up transaction alerts for your credit cards. It’s a good idea to check your card statements once a month, but you can also monitor for gray charges in real time using credit card alerts. You can set up an alert to notify you each time a new transaction posts to your account or each time a new transaction posts that’s over a certain dollar amount. You can then log in to your account to see those transactions at a glance and confirm that they’re charges you agreed to.
How to Track Your Autopay Subscriptions
It can be challenging to track all your recurring subscriptions each month, especially when you have autopay turned on. Luckily, there are a variety of apps – many of which are free to use – that will do it for you:
- Rocket Money. This app centralizes all your subscriptions and due dates in one place, so you can stop paying for things you no longer need. The app also includes budgeting tools and can cancel unwanted subscriptions on your behalf.
- Intuit Mint. Similar to Rocket Money, Mint allows you to track all your subscriptions in one place. The app also allows you to connect all your different bank accounts, build a custom budget and view your credit score for a full financial picture.
- Bobby. If you are anxious about putting your bank account details into a new app, Bobby may be the subscription tracking app for you. Bobby has users input their subscriptions manually, including the monthly price and billing date. The app’s clean interface and payment reminders make it easy to track your monthly subscription spending.
Aside from alerts, your credit card may offer other resources to help you fight recurring charges. These banks offer additional personal finance tools:
- Capital One. Eno is a virtual assistant that helps Capital One cardholders answer questions, keep their account secure and provide spending insights. Eno can notify you when a free trial is ending, monitor automatic bill payments and assist you if your card is declined.
- JPMorgan Chase. Using the Chase Mobile app, cardholders can see places they’ve saved their card information online. Chase Mobile app users can also review repeating charges or changes to their normal charges.
Bottom line? Recurring credit charges can be a pain, but you don’t have to be stuck paying them.