'Gray Charges': Another Hidden Peril on Your Credit Card Bill

Americans Pay $14.3 Billion in Unwanted 'Gray' Charges

Everybody knows it's a good idea to monitor your credit card bill for unauthorized and fraudulent charges. But what about legitimate charges that you forgot you'd agreed to?

They're called 'gray charges,' and they tend to happen when you sign up for a free trial of a service and then forget that it's due to roll over into a paid subscription at the end of the month. They may also be a results of hidden or deceptive charges, or a subscription auto-renewals that you didn't know were coming.

And apparently, they can really add up. Billguard, which makes an app intended to help you spot and dispute these charges, says that they cost American cardholders $14.3 billion a year. The biggest category is "free-to-trial" charges, which can apply when you sign up for a free trial from services like Netflix, Amazon Prime or LinkedIn Premium.

Using an app like Billguard doesn't necessarily eliminate these charges. It does empower you to spot them and then reach out to the companies charging you, but not every company will refund you the charge just because you forgot that a bill would come due at the end of the trial. (Though if you feel you were mislead or defrauded, then you do have the option of asking your credit card company to do a chargeback.)

That's why it's important to avoid a "set it and forget it" mentality when signing up for free trials. When you sign up for one, consider setting up a calendar reminder toward the end of the trial period so that you can cancel it if you decide you're not crazy about it. That's especially important when it's an annual subscription versus a monthly one. Accidentally letting your Aereo free trial become a paid subscription will cost you $8 if you don't cancel in time; letting your Amazon Prime membership roll over will cost you $79, as it's charged on an annual basis.

Sometimes, your biggest budget-busters can be the things you "purchase" automatically, so keep a close eye on your subscriptions and be sure to cancel the ones you don't want.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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So much for Obama's Credit Revisions Rules !!!

July 29 2013 at 1:31 PM Report abuse +1 rate up rate down Reply

If you agree to the charges when you sign up for the card, why would you think you are ENTITLED to fight the charges? They are your responsibility, you agreed to them. Why are so many people looking to get out of bills that they agree to?

July 29 2013 at 12:22 PM Report abuse rate up rate down Reply

I rarely write checks since our banking is done on-line. However, a check works better for us with something like magazine subscriptions, etc. People do forget to stop something they don't like that has been charged on a credit card, but if you pay by check, they have to notify you.

July 29 2013 at 10:50 AM Report abuse rate up rate down Reply

Food for thought: "let the buyer beware"; there is a sucker born every minute".

July 29 2013 at 10:06 AM Report abuse +1 rate up rate down Reply

ivery accurate article. I once signed up for major league baseball. I didn't want it the next year but it billed me anyway. by the time I saw it on the credit card it was too late to cancel.

July 29 2013 at 9:09 AM Report abuse rate up rate down Reply

WoW! for having 1/2 of Brain you take it personally!!! Rember is only a comment!!

July 29 2013 at 8:23 AM Report abuse rate up rate down Reply

I personally believe it should be illegal for credit cards to do this, This actually reminds me of the website justfab.com. When I was trying to order a pair of shoes (didn't in the end because I don't have an active CC), I was informed that once I purchased a pair of shoes i was some certain type of member where, if I didn't officially choose to 'skip' a month by the 5th, a $40 charge would be added to my account (effectively my credit card probably). Problem is, 5 days is not a long time. If someone is experiencing an emergency that the cannot prove during those days, I bet just fab would be 'well that's our policy, and not our fault that you didn't opt out/ skip this month, 'sorry'!' But yes, one should really watch their credit card(s). Also, I wonder how many credit cards lock people into those grey charges long term? I hope none because if so, that should also be illegal without full consent.

July 29 2013 at 8:02 AM Report abuse rate up rate down Reply
1 reply to jbrockca's comment

Exactly! I almost got caught also. When I am in doubt, I simply call my bank.

July 29 2013 at 10:03 AM Report abuse rate up rate down Reply

Gray Charges sneek into your credit cards if you are not attentive. I was on line checking my credit history with the three credit reporting groups when I clicked on a look alike credit rating company. This company signed me up for monthly monitoring my credit status. They sent me an email requiring me to take an action to prevent a monthly contract and billing. The companies name and message was received by my spam filter and I deleted it as unknown. Therefore, I was committed to monthly payments. When I notified the company that I was prepared to report them for scamming the elderly, they deleted the charges. So lookout for scammers.

July 29 2013 at 7:33 AM Report abuse +1 rate up rate down Reply

Yes. I've been a victim of this scam, myself. I would like to see Congress come back from one of their many vacations and 4 day work week and do something about this. Negative publicity for the scam artist companies doing these charges should also help. Please pass along the names of each of these Fortune 500 companies to your distribution list on the Internet. If the CEO's get enough negative publicity, maybe they will voluntarily discontinue the practice. That's probably more likely than Congress crossing the paths of the lobbyists who donate millions of dollars for their re-election campaigns.

July 29 2013 at 6:54 AM Report abuse +1 rate up rate down Reply

The absolute worst one in that category is the free satellite radio that yoou get with a new car purchase. Yeah, it's free for 2 years but if you don't specifically cancel it in writing before the end of the two years, you will get socked for very expensive monthly charges. And when you say that you didn't order a renewal they will tell you tough nuggies. And they will send you to a collection agency.

July 29 2013 at 6:28 AM Report abuse +2 rate up rate down Reply