Understanding gray charges

They may be costing you money—here’s what you need to know to avoid them.

Gray charges are monthly fees you’ve opted into without realizing it—like automatic renewal of a gym membership or a free trial that later converts to a paid subscription. If you don’t keep a close eye on your account statements, you may not notice you’re paying for these things.

Common types of gray charges

Gray charges often fall into the following categories:

  • Free-to-paid: After a free trial period, the seller automatically charges you a fee unless you cancel or return the goods. 

  • Phantom: After a paid transaction, you receive and are billed for an additional product or service from the seller or a third party. 

  • Zombie: Your subscription or membership doesn’t end even after it’s canceled. 

  • Unintended subscription: A one-time transaction turns into an unwanted
ongoing subscription. 

  • Membership: You agree to receive and pay for merchandise periodically unless the seller is notified not to send it. If you take no action, the seller charges you and sends goods. 


Tip: Make sure you read the fine print (also known as the terms and conditions) and ask about future charges whenever you make a purchase or sign up for something.

Detecting and dealing with gray charges

Review your credit card and bank account statements every month so you know what you’re being charged. You’ll be able to track gray charges, fraudulent charges and refunds you’re due, and observe your general cash flow patterns.

If you notice gray charges you would like to stop paying, you can contact the company to cancel any auto-renewing subscriptions or services you don’t use. Check back and keep an eye on your account statements to confirm the cancellations have been made.

Disputing charges

You may be able to dispute unexpected charges and get your money back. Good candidates for dispute include cancellation requests that weren’t honored, duplicate charges and billing errors.

To dispute a charge, first contact the merchant to see if they’ll issue you a refund. If that doesn’t work and the charge is on your credit card, consider lodging a written complaint with your card company. You typically have 60 days to dispute a credit card charge, so it’s important to move quickly. The Federal Trade Commission website has a sample letter you can use.

Understanding gray charges can help you stay on top of your finances. Eliminating unnecessary ones can free up money you can put to better use, like paying down high-interest debt or saving for other important goals. 

Close Disclaimer
The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

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