Why (and How) You Need To Review Your Credit Card Statement

By Craig Ford (Staff Writer), on September 30, 2009

I have heard it is said that people spend more with credit cards than with cash. I believe those statistics based on my personal experience. However, there is something to be said for the convenience of the credit card because there are advantages of credit cards over cash. One way to minimize the cost of credit cards is by avoiding common credit card mistakes and by doing a review of every transaction each and every month.

Photo by Asim Bijarani via Flickr.

Four Reasons Why it is Essential to Review your Credit Card Statement Each Month

1. To be sure you are not signed up for any ongoing charges or subscription-based services, which you no longer use. While reading Permission Marketing: Turning Strangers Into Friends And Friends Into Customers by the status about the number of people who automatically subscribe for a service and continue paying for that service even after they no longer use the product. In addition there may be services for which you may have unintentionally subscribed. Perhaps you did subscribe, but thought the service was free.
2. To protect yourself against downright shady practices. You may be charged for credit card services that you never approved (at least not intentionally).
3. To check for human error. It is possible for a merchant to accidentally double charged your card. It is possible also that your card is accidentally used to processed a different purchase. And of course, these things can also happen intentionally.
4. To verify that your card has not been used fraudulently.

How to Review your Monthly Credit Card Statement

1. You should go through your bill each month and read (don’t scan) every “Merchant Name or Transaction Description” and “Amount”. If you have a paper copy, you might find it helpful to use a ruler to be sure your eyes are not jumping down the line. Put a small checkmark or highlight every charge that your recognize. If you have PDF statements use a highlight feature for charges you recognize. If you use and computer budgeting system you will be required to manually approve / categorize each transaction.

2. Probably your first time through you have approved 80-90% of the transactions. The majority of the remaining items will likely be charges you forgot, but you must verify that. Now, got back through the list of and find the first item you did not check. Back up and read the “date” column. You will need to juggle your memory to verify if the purchase is legitimate. Here are some suggestions:

• Check your calendar — is there something there that makes sense regarding your purchase.
• Ask your spouse or someone else close if “$15.00″ at Hank’s Mart sounds familiar.
• Talk to every other card members on your account. This is essential.

3. If you still cannot verify the purchase call your credit card company (or get online) and ask for more details on the transaction. They will be able to give you a purchase order / transaction approval number and possibly even the company phone number.

4. If none of the information from the credit card company sounds right or familiar you will need to call the actual merchant in question. If the credit card company does not have a number on record just Google the company name and the phone number will come up. Say something like the following:

Hi, I was reviewing my credit card statement and saw a charge from your organization. Unfortunately, I am having a little trouble confirming some of the details around the purchase. Do you think you would be able to help me get some information?

Remember: There is no need to be accusatory. No need to be defensive. At this point there is a good possibility that you just plain forgot something bought.

5. If you come to find out that you did indeed make the purchase, check it off on your statement and continue on the next purchase you did not initially recognize.

6. However, you come to find out that you did not or could not have made the purchase you should either:

• Tell the person on the phone that the charge doesn’t seem legitimate, but you need a few minutes to confirm things
• Tell the company representative that you are certain you did not authorize those charges. Be firm, but not rude. Be sure also to share the reasons for your certainty. You were out of town on the mentioned date. You have absolutely no interest in the product. Kindly request that the charge be refunded to your account. At this point they will respond in one of two ways (typically depending on the nature of their product and their company philosophy). First, they might apologize and reverse the charges or offer to give you more information. Second, they might simply say, “There is nothing that they can do.”

Remember: If there are other card members on your account you will need to proceed cautiously. It is possible someone did make the purchase and forgot or even just plain lied about it. Don’t claim someone did something wrong until you are certain.

7. Your final step will be to contact your credit card company and file a dispute claim. Inform them:

• What the purchase in question was,
• How you know that purchase is not legitimate or why you feel it is not legitimate.

Say something similar to the following:

Hi. I was in the process of looking over my statement when I noticed a discrepancy. I contacted the merchant, but they were unable to help me because _______. I am certain I did not make / authorize that transaction because __________. I was just wondering if you could help me resolve this issue?

Remember: The credit card company may not just lay down and play dead. You will need to be persistent. However, even the little guy can win a few with the credit card company.

My Experience

I have had to do credit card disputes three times. Here are the results.

1. A magazine company continued charging me after I canceled my subscription. They would not refund the money. I called my credit card and they reversed the charges. Resolution time: 15 –20 minutes.
2. Somehow I was signed up for some extra services through a credit card offer. You know the kind of coverage if you loose your job and can’t make a payment. I called the credit card company and after a little force, they reversed the charges. Resolution time: 30 –45 minutes.
3. I was doing business with an Internet company and canceled my service. I called the Internet company and they claimed to have resolved the issue and claimed to be offering me a refund. After a month the charges kept appearing and there was no refund. I called the credit card company and they reversed the charges. Resolution time: 20-25 minutes.

If you are a credit card user it is absolutely essential that you monitor and personal verify each and every one of your purchases.

Anyone else had a charge on their account that you needed to dispute? What happened?

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Craig is a fulltime missionary in Papua New Guinea who writes Money Help For Christians and Help Me Travel Cheap, a frugal family travel blog. He is the author of Money Wisdom From Proverbs, has a Masters of Divinity degree, and (most importantly) eats homemade pizza with his family every Friday night.

All posts by Craig Ford (Staff Writer)

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