Gray Charges

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Credit Card Teaser Rate

    A lower-than-normal interest rate that a credit card company ...
  2. Credit Card Authorized User

    Definition of an authorized user of a credit card.
  3. EMV

    A standard relating to integrated circuit cards, point-of-sale ...
  4. Integrated Circuit Card

    A card that has an embedded circuit, such as a computer chip. ...
  5. Debt Consolidation

    The act of combining several loans or liabilities into one loan. ...
  6. Straight Credit

    A type of letter of credit. A straight credit can only be paid ...
Related Articles
  1. How To Dispute A Credit Card Charge
    Credit & Loans

    How To Dispute A Credit Card Charge

  2. Make Money Off Credit Card Sign-Up Bonuses
    Credit & Loans

    Make Money Off Credit Card Sign-Up Bonuses

  3. Five Credit Card Perks That Will Cure ...
    Budgeting

    Five Credit Card Perks That Will Cure ...

  4. What You Need To Know About EMV Credit ...
    Credit & Loans

    What You Need To Know About EMV Credit ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center