Using Credit Cards? Watch Your Statements For Overcharges

Credit cards are fast becoming the de facto standard for non-cash transactions. In fact, during the past few years, more and more people moved towards using credit cards for purchases instead of cash. The economic downturn and the resulting credit card crisis may have slowed that down a bit but, in the long run people will probably still prefer the convenience of using a credit card or similar type of service instead of cash transactions.

Using Credit Cards? Watch Your Statements For Overcharges

The convenience of credit cards is not without risks. In fact, the more sophisticated technology required for allowing credit card transactions introduces more risks as well. One of the biggest and most concerning for credit cardholders is the risk for overcharges.

Overcharges happen when a credit card holder receives charges more than they actually paid for. There are several factors that can result to overcharges such as mathematical errors, human errors and the like. Overcharges are not rare, too and, according to experts in consumer affairs, they are mostly seen when credit card payments are made at restaurants, hotels and gas stations.

Brian Rauer, the executive director of the Better Business Bureau for the Long Island and Mid-Hudson region says that overcharges could be caused by “as simple as an error, a mathematical error”.

Another possible reason for overcharges, experts say is the practice of credit card issuers of sometimes freezing a certain amount when the credit card is already swiped at the gas station, the express checkout or the restaurant but the total amount of the purchase is not yet made. The amount could range from $75 to 100$ or even more, depending on the situation.

Spokesman for MasterCard Tristan Jordan says that credit card issuers follow this practice in an effort to make sure that there are enough funds to cover the transaction. He said, “The issuer has to protect itself against insufficient funds”.

Thus, when a credit card holder’s card gets swiped, the card issuer holds a fixed amount they assume cover what will be the final amount of the purchase. Once the transaction goes through though, the hold is expected to be lifted and the remaining amount not used up by the transaction credited back to the card holder. Jordan says that the account freeze has to be lifted within twenty four hours of the transaction.

For credit card holders, what this means is that they need to remain vigilant in keeping a watch on their credit card statement and they need to ask for and keep receipts of any credit card transactions. It is important to compare the amount in the receipt against the amount actually printed on their credit card statements to determine if there are any discrepancies or overcharges. If there are, a quick call to the merchant involved or to their card issuer can usually clear things up in a jiffy.