5 Credit Card Rip-Offs to Watch Out For
By Barbara Pronin
Unless you are in the habit of checking every
transaction on your monthly credit card bill, you may fall prey to the extra or
unauthorized charges that find their way to the statements of one out of every
four credit card users each year.
These ‘grey fees’ appearing on your
bill may not actually be fraudulent, according to the consumer watchdogs at
BillGuard. More likely, they are legal if unwanted charges that were hidden in
the fine print of another transaction.
Financial expert Farnoosh Torabi
urges consumers to examine credit card bills closely. Be on the lookout for –
and question the responsible merchants – about grey area charges that may have
been incurred in five common ways:
Free-to-paid goods or services – Often incurred while
shopping online, these are fees for turning free trials into ongoing paid
purchases. For example, you sign up online for a free trial of cosmetics or
vitamins. It seems like a good deal, but the fine print in the offer may include
ongoing charges and/or future deliveries. Unless you cancel the ongoing service,
you may continue to be billed.
- Unwanted offers – Say you purchase a pair of running shoes
online. Unless you read the fine print, and perhaps uncheck a box, you may also
inadvertently sign on for a subscription to a runner’s magazine or some other
unwanted ancillary product.
- Negative opt-out marketing – You order something online and
when it arrives, another product is included in the package. Don’t assume it is
a free gift. Read the fine print on the invoice, because in accepting it, you
may be agreeing to receive additional products monthly, for which you will be
- Automatic renewals – Just because you’ve cancelled a
service or subscription, such as a gym membership or even a credit card, doesn’t
mean it has been instantly cancelled. Check your statements for annual or other
fees that may have been charged before the cancellation took effect.
- Cost creep – It may amount to only pennies or dollars
monthly on the cost of what you pay for product insurance or cable or other
services. But watch your bills and be alert for unexplained cost creep-ups that
keep occurring without explanation.