Gray Charges


DEFINITION of 'Gray Charges'

Fees consumers pay via credit card or debit card for unwanted subscription services that are automatically renewed or that are automatically converted from a free trial to a paid subscription. Gray charges also include hidden fees and billing areas. In total, gray charges constituted $14.3 billion in consumer spending in 2013, according to a consumer protection service called BillGuard.

BREAKING DOWN 'Gray Charges'

While gray charges are not illegal, they lie in a moral gray area. On one hand, consumers technically agree to these charges when signing up for the subscription; on the other, companies may be banking on consumers forgetting to cancel unwanted or unused subscriptions instead of relying on consumers’ active intention to continue paying for them. In addition, because gray charges are typically small, some consumers find it more trouble to cancel or dispute them than to continue paying them.

To avoid gray charges, consumers should read the fine print before signing up for a free trial or subscription using a debit or credit card. Check whether the merchant will automatically charge your card for the product or service when the trial period ends or the subscription is about to expire. Review your monthly statements carefully for unwanted or mistaken charges and contact vendors promptly to cancel unwanted purchases. For gray charges made to a credit card, it may be possible to get the charges reversed by submitting a dispute through the card issuer if the company initiating the gray charges is uncooperative.

  1. Credit Card Teaser Rate

    A lower-than-normal interest rate that a credit card company ...
  2. Transferable Points Programs

    With transferable points programs, customers earn points by using ...
  3. Luhn Algorithm

    An algorithm used to validate a credit card number.
  4. Roll Rate

    The percentage of credit card users who become increasingly delinquent ...
  5. Truncation

    The requirement mandated by the FTC for merchants to shorten ...
  6. Purchase Money Security Interest ...

    A security interest or claim on property that enables a lender ...
Related Articles
  1. Credit & Loans

    4 Ways to Check Credit Card Accounts for Trouble

    Credit cards do offer some protection against fraud, but here are 4 reasons to be vigilant and protect your credit score against scammers and mistakes.
  2. Credit & Loans

    How To Dispute A Credit Card Charge

    Follow these steps if you've been ripped off or spot an error on your bill.
  3. Credit & Loans

    Make Money Off Credit Card Sign-Up Bonuses

    It's easy to benefit from credit card sign-up bonuses, but you have to know what you're getting into.
  4. Budgeting

    Five Credit Card Perks That Will Cure Many Headaches During Your Summer Trips

    It is a time when credit cards will become more than just convenient payment methods.
  5. Credit & Loans

    What You Need To Know About EMV Credit Cards

    Finally, the U.S. is beginning to move to EMV credit cards. Here's how they'll keep us safer and what they won't fix.
  6. Credit & Loans

    Reasons You Should Use Your Credit Card For Purchases

    Paying for everything with your credit card will earn you rewards and protect you against fraud, among other benefits.
  7. Retirement

    Understanding Credit Card Interest

    Paying these rates can impact your disposable income and your investment returns.
  8. Budgeting

    5 Steps To Disputing A Credit Card Charge

    Federal and state laws offer protection to consumers when credit card charges are in question.
  9. Credit & Loans

    Walmart MoneyCard Vs. Walmart Credit Card

    Discover how the Walmart MoneyCard and the Walmart credit card have different benefits that may influence your decision on which one to choose.
  10. Savings

    These 10 Habits Will Help You Reach Financial Freedom

    Learn 10 key habits for achieving financial freedom, including smart budgeting, staying abreast of new tax deductions and the importance of proper maintenance.
  1. What are some examples of sneaky credit card charges to watch out for?

    Since it took effect in 2010, the Credit CARD Act has outlawed many of the sneaky fees that creditors used to use to pad ... Read Full Answer >>
  2. How many free credit reports can you get per year?

    Individuals with valid Social Security numbers are permitted to receive up to three credit reports every 12 months rather ... Read Full Answer >>
  3. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reducing the number of times shoppers and buyers have to pay for ... Read Full Answer >>
  4. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
  5. Is it possible to get a free credit report from Equifax?

    It is possible to get a free credit report from Equifax, as well as the other two major credit bureaus, Experian and TransUnion. ... Read Full Answer >>
  6. How can you cancel your Walmart credit card?

    Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How to Close Your Walmart Credit ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center