If you use credit or debit cards, you owe it to yourself to go over your statements each month.
If you don't, you run the risk of paying for unauthorized charges that over time can add up. Whether it's a billing error, an overcharge by a merchant or even a scam, checking your statement can help save you money.
I go over my credit card statement each month, line by line. By doing so, I have discovered a number of mistakes, such as duplicate charges in which a hotel or airline charged me twice for a room or ticket. On one occasion, I found an altogether erroneous charge by a suspicious company. And most recently, I found that a restaurant charged me more than I had agreed to pay for my meal plus my 20 percent tip.
Monitoring charges may add one more item to your already-filled to-do list. But it's a sound financial habit that can help you save money over the long term. Here's how to keep on top of your credit card purchases:
Record and verify purchases • Keep your credit card receipts in an envelope and record the amount of any other purchases for which you don't get a receipt. When you get your statement, verify each charge line by line. File or shred receipts once your finished with them.
Monitor recurrent purchases • Many consumers sign up for automatic payment plans for purchases of a wide range products such as insurance policies, magazine subscriptions and annual memberships. Each year, their credit cards are charged automatically. Keep a log of these items, when they will be renewed and what you will be charged and the next billing date.
Know the rules of trial programs • Many companies, such as Netflix, offer free trials of its products. But they don't just end after a specified period of time; you must cancel them yourselves. And if you neglect to cancel the trial by the specified date, you will be charged for the next month. Even if you cancel in time, make sure you aren't charged anyway.
Report errors, no matter how small • Some consumers may see a 25-cent or 5-cent charge they don't recognize and figure it's not worth the hassle to report it. But report it, immediately. Some crooks who get a hold of a consumer's credit card number will use that number to place a small charge or two as a test before later trying to push some larger charges through.
Read the fine print • I've heard from plenty of readers over the years who have made what they thought was a one-time purchase only to discover they actually have enrolled in an ongoing purchase plan.
Consider using credit instead of debit • I actually stopped using debit cards altogether years ago after an airline mistakenly charged me for the same airline ticket four times and drained my checking account in the process.
When you use a credit card, you have some breathing room to deal with mistakes and even fraudulent charges. Most card companies will even remove the unauthorized charge from your card while it is being investigated.
With a debit card, your balance or a big chunk of it could disappear for days or even weeks while your bank or credit union tries to sort out the problem.
Lesley Mitchell writes One Cheap Chick in daily blog form at blogs.sltrib.com/cheap.
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