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Your money how to stop sneaky grey charges on credit card bills


(The writer is a Reuters contributor. The opinions expressed are his own.)By Chris TaylorNEW YORK Aug 24 Hey, remember that newsletter that let you sign up for a free trial?Didn't think so. How about that old domain name you registered, or your kid's gaming membership, or the magazine subscription that was initially offered as a freebie. Forgot about those too, didn't you?Rest assured those companies didn't forget. But they are probably counting on you to do so. That way they can keep charging your credit card, every year or every month, in perpetuity. And you may not even realize what is going on. There is even a name for all these sneaky little ongoing fees: 'Grey Charges'."Nine out of 10 people don't check their credit-card charges carefully," says Mick Weinstein, vice president of software company BillGuard. "And even if they do, it's too time-consuming to dispute those charges. So most people simply let them go."Such fees are not illegal, per se. But they are designed to keep you on the hook.

The result: 233 million grey charges a year, amounting to a whopping $14.3 billion dollars, according to a 2013 study by industry analysts Aite Group. That is an average charge of $61 per credit card bill. Just ask Holly Gordon. When the healthy-living consultant from Shawnee, Oklahoma downloaded software called 'You Need a Budget', she started discovering all sorts of little charges she had completely forgotten about."I was horrified at the number of surprise subscriptions we had," says the 47-year-old. To wit: Auto-paying for satellite radio since 2009, spending almost $200 annually, along with another $15 every month on various magazine subscriptions on Amazon's Kindle device."Those pesky one-time, quarterly and annual fees just kept popping up, sending my budget into panic mode," Gordon says. The most common grey charge, according to the Aite Group report: "Free-to-paid," where a free introductory period expires and a paid subscription kicks in. Those amount to more than 115 million transactions a year, at a cost of more than $6 billion.

There are plenty of other types of grey charges, too - many with frightening monikers. "Phantoms" are additional products or services tacked onto another transaction. "Zombies" are subscriptions or memberships that keep charging you, even after you have canceled them. REVIEW STATEMENTS Step one for consumers is to go over your credit-card statement with a fine-tooth comb every month, instead of just blindly paying up.

"Grey charges make it even more important to scrutinize your credit card bill and really look at every charge - especially if you are on auto pay," says Michael Schreiber, editor-in-chief and chief content officer of Credit.com."Often people just scan and look for big charges that they don't remember making, or just the total amount due," Schreiber notes. "But those little charges can really add up."If you do discover a sketchy charge, take it up with the merchant or the credit-card issuer. Even if they don't give you credit for past charges, at least you can nix them going forward. Most of all, don't think of a grey charge as a minor issue that is not worth your time. After all, even a measly $5 a month turns out to be $60 a year, which turns out to be $300 over five years. With BillGuard's smartphone app, you can even let its staff dispute grey charges for you. Chicagoan Zach Moss, for instance, once purchased a one-day Boingo Internet pass - and then started to get dinged $9.99 every month. After a few smartphone taps, BillGuard challenged those charges, and Moss got refunded for three full months. Indeed, the payoff can be major. In part because Gordon started rooting out and killing all those grey charges - think of it like weeding a garden - she and her husband now expect to be out of consumer debt by the end of the year."It's so easy to put your money on auto-pilot and just zone out," Gordon says. "But it always comes back to bite you."

Your money should the tooth fairy just vanish forever


Oct 6 When Claer Barrett, a London-based editor, filed her newspaper column a few weeks ago, it didn't take long for her to realize she had hit a major nerve with its subject matter. A dental nerve. The personal finance editor for the Financial Times had proposed the unthinkable in a recent column: Killing off the tooth fairy. Her logic? In making our kids' first interaction with money a fanciful one, where cash suddenly appears under their pillows from a "magical source," we are doing them a disservice. Predictably, Barrett's email inbox blew up."I had to call for the death of the tooth fairy to make my wider point about personal finance education," Barrett says."Many people were angry with me for denying children the fantasy of believing in the tooth fairy, but I argued that they needed to know about financial reality. The tooth fairy is the just tip of the iceberg."After all, if you introduce young minds to that kind of magical thinking, it can persist for years - in terms of not realizing that money has to be earned, not appreciating the true value of a dollar, and not realizing that their latest must-have iPad or smartphone comes with a huge price tag.

VALUABLE MILK TEETH Indeed, the tooth fairy has become a rather big business. According to the Original tooth fairy Poll by Delta Dental, the average reward for a lost tooth in the U.S. in 2014 was a whopping $4.36 from $3.50 a year ago, up by about 25 percent. On the flip side, some financial experts say it may be an overreaction to make the tooth fairy vanish for good. After all, to a young child, having teeth fall out of your mouth could be a frightening thing, and the promise of a reward might ease the pain."I have no issue with the tooth fairy," says Melissa Brennan, a financial planner in Dallas who gives her children a relatively modest dollar for each fallen tooth.

"Children should be given a variety of experiences with money: Sometimes we receive money because we earn it, but sometimes it is a gift."Overindulgence could be an issue in some families, but Brennan suspects that in those cases, the issue may be deeper than the tooth fairy. Indeed, 3.6 percent of parents - ahem, I mean tooth fairies - leave a whopping $20 or more per tooth, according to a separate survey by credit-card issuer Visa. At those rates, don't be surprised if you find your child trying to speed the process along with a pair of pliers.

MAKE IT A LESSON Those who prefer to keep the fantasy of the tooth fairy alive may wish to turn the event into a teachable moment about the decision of what to do with the money after it magically arrives. Do your kids immediately blow the windfall on candy or iPhone apps? Or are they forward-thinking enough to earmark some cash for things they will need in the future?That is where parents can step in and provide some guidance. You could teach kids about the popular "bucketing" approach to money management. For instance, putting some aside for spending, some for saving, and some for giving to charity in separate jars."Done correctly, the tooth fairy myth is useful in teaching young children about looking through the pain of loss, and being rewarded for going through something unpleasant which leads toward future growth," says Hank Mulvihill, a financial planner in Richardson, Texas. For Claer Barrett, it was a surprise just how much emotion was generated by the idea of saying goodbye to the tooth fairy. It was as if she had just strangled Santa Claus."I have appeared on three national radio stations talking about my fairy death warrant so far," she says. "It encourages me that the message is getting through to parents around the world."

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