One of the most useful personal finance tools is your credit card. You can use it to buy products and services online, set up automatic payments, finance larger purchases, and start to build your credit history. However, you must use your credit card responsibly.
While effectively managing your debt is a top priority, spotting false charges, as well as compromised or stolen credit card details, is also your responsibility. To prevent these issues from going undetected, it’s good practice to check your credit card statements routinely. Plus, this habit could save you money!
How could reviewing your credit card statement save you money?
Nobody’s perfect! That includes credit card companies and vendors. Sometimes a credit card company will charge you a fee that they shouldn’t have, or a vendor will charge you the incorrect amount. Although many credit card issuers will have fraud alerts and other safety features, every issue is not always detected.
The more diligent you are at checking the activity on your credit card statement, the more errors you are likely to catch, which will save you money in the long run. Make sure to review the activity on all your credit cards. Some pending transactions will appear shortly after making a purchase, while others may take some time. You can typically cross-reference the value of your purchases with the available credit limit to see if you are spending within your budget. If your available credit has dropped significantly and it doesn’t coincide with your recent purchase history, this can indicate fraudulent activity.
What to look for on your credit card statement
When you’re beginning to review your monthly credit card statements, you might not know what to look for or what each charge is exactly. Some vendor codes won’t appear as the name you expect. But once you get into the routine, you’ll be a pro at identifying your transactions and catching errors!
Here are tasks you can perform and items to look for when reviewing your credit card statements.
- Match receipts and bills to your credit card statement to ensure the charges and amounts are correct.
- If you automatically pay your credit card bill, make sure this feature is working. Missed payments can affect your credit score.
- Keep an eye out for incorrect bank charges, such as over-limit or cash advance fees.
- Identify charges that may be a result of stolen information or don’t appear to be your own. In a strange story out of B.C., one man paid another man’s telephone bill for five years without noticing, totalling $11,384.60.
- If you’re expecting a refund to your credit card, check that you received it. Always keep your return receipts or transaction numbers in the event of a dispute.
- Look for double charges that may result from a vendor error.
- Check for charges that should be on your credit card but aren’t. This step can help you avoid late fees from utility companies or other service providers.
- Credit cards are subject to interest rate changes. Issuers are required to make these announcements in advance, but you should be aware of how they may impact your statement.
- If you haven’t signed up for credit card insurance but see premium charges on your account, you may be entitled to a refund. According to CBC, an Ontario woman received nearly $7,500 back after contacting her credit card company because she has never signed up for the service.
What to do when you find a discrepancy on your credit card statement
Discrepancies can be transactions where the purchase amount, date, merchant name, or location are unfamiliar. Claims can also be made for purchases that are damaged or that you failed to receive. The process differs depending on the nature of the discrepancy you’ve found.
Continue to pay your credit card bill
Often, the discrepancy on your credit card statement is an issue with a vendor, not the credit card company. For this reason, you should continue to pay your credit card bill on time and in full. If you cease to pay your credit card bill, you’ll not only accrue interest on your balance, but you’ll hurt your credit score as well.
Check with authorized users
If you have authorized users on your credit card, check with them before investigating further. Maybe the miscellaneous charge is a result of their spending.
Contact the vendor
Often the easiest way to handle disputes is by contacting the vendor directly. Be prepared to provide documentation on what you have purchased. Proof can include itemized receipts or confirmation emails.
If you’re contacting a vendor regarding a missed charge that should have gone to your credit card, be prepared to update your payment details with the vendor. It could be as simple as they forgot to charge you, or your automatic payment details were incorrect.
If you can’t handle the issue with the vendor directly, you can escalate the situation with your credit card provider. You will likely need to provide the issuer with proof of communication from the merchant, such as email correspondence or a reference number.
How to dispute a transaction
If you need to dispute a transaction with your credit card company, time is of the essence. Credit card issuers typically have a reporting window within a certain number of days of the credit card statement being issued. For most banks, cardholders must report a discrepancy within 30 days.
To make a dispute, simply call your credit card company or bank and provide the date, vendor name and amount. They may also request secondary information such as the location of the purchase and time of day. From there, you may be required to send receipts and other documentation to support your claim or sign a confirmation request by mail.
Unfortunately, there is no guarantee the provider or merchant will remove the charge when filing a dispute. The bank will contact the vendor’s bank to discuss the matter. Whatever agreement they reach will be the result of the filed dispute.
The more intimate you become with your finances, the better the chances are that you will catch errors or fraudulent activity. You will also stay on top of your bill payments, purchases, refund statuses, and transactions. Catching false charges or mistakes on your credit card can save you money.