This article is brought to you by the Personal Finance Insider team. It has not been reviewed, approved, or otherwise endorsed by any of the issuers listed. Some of the offers you see on the page are from our partners like Citi and American Express, but our coverage is always independent. Terms apply to the offers listed on this page.
- My fiancé and I went through our 2020 credit card statements while creating a joint budget, and discovered numerous mistakes that cost a lot of money or took time to fix.
- Not canceling subscription services and free trials I'd signed up for was a big culprit, in addition to forgetting about online purchases I'd returned.
- We also spotted possible fraudulent charges and opportunities to curb overspending.
- By checking my credit card statements at least once a week, I could have saved money, time, and hassle.
- Lower your monthly bills and stay on top of your financial life with TrueBill »
One of the biggest financial mistakes I made in 2020 came back to haunt me — big time — when my fiancé and I took inventory of each other's spending habits. We sat down at our kitchen table to work on creating a realistic joint budget (for the first time in our relationship) and combed through each other's credit card statements for the year.
While my fiancé was eyeballing my credit card purchases, he began questioning some of my charges and prompted me to give them a closer look. What I found was a series of big mistakes, mishaps, and misuse of my money that cost me some serious cash. Because I hadn't paid close attention to my credit card statements, it seemed I had erroneously spent hundreds of dollars.
After the shock settled in, I decided to make it a goal in the new year to look over my credit card statements once a week, every week, so that I wouldn't make the same blunders again. Here are the credit card mistakes that cost me the most money and how you can make sure they aren't sneaking up on you too.
Forgetting about recurring charges
One of the first things I was frustrated by was the monthly recurring charges I had accumulated — for subscriptions I either forgot I had signed up for or was hardly using.
At the beginning of the pandemic, I had said yes to free trials for a workout program that I tested out for a week or two and then forgot to cancel before the monthly charges kicked in. A similar thing happened with a streaming service I signed up for and didn't use, and a grocery delivery program I had tried but didn't properly cancel and was still getting charged for.
While this was entirely my fault and something completely preventable, it was easy to overlook and forget to cancel these subscriptions. Next year, anytime I enroll in a subscription service, I will have weekly checks in place to make sure I'm in control of them.
A good way to prevent this in the future is to set a calendar reminder for a few days before a free trial ends to alert you to cancel or revisit your options. In the case of subscriptions you pay for but don't use, assessing this at the end of every month will allow you to make sure you press the "Do not renew next month" button before you incur another round of fees.
Check out our partner TrueBill to cancel unwanted subscriptions »
Failing to track refunds on returns
Before the pandemic, I didn't do a lot of online shopping. But as stores shut down, I began buying almost everything through eCommerce retailers. When packages arrived, 30% of the time I had to send items back (because they didn't fit or they weren't of good quality). I got lazy with tracking these returns and once the package was shipped back to the store, I forgot about it.
I never kept tabs on my credit card statement to see if a refund was processed. When I was looking at my statements from the summer, I noticed a pair of shoes I had mailed back never showed up as a credit on my statement. This prompted me to search for the receipt and tracking notification, and it took numerous phone calls with customer service to get this sorted out. Eventually, the refund was processed. If I hadn't fixed this, I wouldn't have received the $130 refund to my credit card.
The best way to prevent this from happening is to stay organized. Set up a tracking spreadsheet to mark down all returns you ship back, the tracking number of the package, and the date it was sent. Then create a weekly alert to keep an eye on the return. This way, you can make sure that your refund is processed and if it's not done in a timely manner, you can get involved to see what's going on.
The longer you wait, the more of a headache it will be to get sorted out — and if by chance the package was lost, customer service may no longer be able to help.
Overlooking incorrect credit card charges
A recent error that my fiancé found came from a dinner we had a few weeks ago. He noticed the restaurant charged my card $75 but we both remembered the bill (with tax and tip) came out to $65. I immediately called the restaurant to share my concern, but I did not keep the receipt so it made disputing this charge harder.
My mom once told me how important it is to keep receipts and only toss them after you've reconciled them on your credit card statement. Going forward, I plan to do this weekly to make sure there aren't any incorrect charges.
While you don't expect this to happen and it's quite rare, the tip you give at a restaurant can be incorrectly entered or sometimes fraudulently recorded. If this occurs when checking your statement, immediately call the merchant and also your credit card company. You can go through the dispute process and the more documentation you have (such as receipts) the easier it will be.
Ruining my budget
An overall lesson learned from looking at my credit card statements at the end of the year was that I had blown through my yearly budget. Since I didn't spend the time to review how much I was spending monthly, I was overspending on things I didn't need (such as takeout, subscription fees, or online shopping purchases).
If I had carefully accounted for my purchases, I would be able to assess how to control my spending throughout the month. Sticking to a budget is a major 2021 goal of mine and the only way to do this is to carefully track purchases weekly.
Making it a habit to look at your credit card statement and accounting for your purchases will help you prevent careless spending and allows you to be even more strategic about what you are charging to your account. Some credit cards even provide spend analyzers that will split up your spending by category, so you can see your habits in a clear chart.
Other credit cards easily let you export your monthly charges, by category, into a spreadsheet. Find a method that works best for you so you can keep track of how your spending matches up with the budgets you set.
Source: Read Full Article