Aug 20, 2024
As a Canadian cardholder, have you ever scrutinized your monthly credit card statement and found yourself puzzled by an unfamiliar charge? You’re not alone. Many Canadians encounter mysterious transactions that can be both frustrating and concerning. But before you panic, let’s explore the common reasons behind these charges and what you can do about them.
Common Types of Unexpected Credit Card Charges in Canada
Pre-authorization Charges
Pre-authorization charges are temporary holds placed on your credit card, often by hotels, rental car companies, or gas stations. These charges verify that your card is active and has sufficient funds.
- Hotels and car rental agencies in Canada typically place larger pre-authorization holds
- When paying at the pump in Canadian gas stations, you may see a temporary charge for the maximum amount you selected
Example: You might see a $200 hold from “Shell Canada” that disappears after a few days, replaced by the actual amount you spent on fuel.
Merchant surcharges and convenience fees
As of October 2022, Canadian businesses can add surcharges to credit card transactions. These fees help offset the costs merchants pay to process credit card payments.
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- Surcharges in Canada are capped at 2.4% or the merchant’s cost of acceptance, whichever is lower
- Quebec prohibits surcharges on credit card transactions
- Merchants must provide clear disclosure of surcharges before you make a purchase
Merchant names may be different on your bill
Another reason you may see a charge you don’t expect on your credit card statement is because a retailer may operate under a different name than what you’re familiar with. Many companies use a parent corporation or payment processing name that may not be immediately familiar to you.
Example: A gas station may appear as a different name on a credit card statement, such as "Esso" instead of "Imperial Oil."
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What you should do if you don’t recognize a charge
First of all, this article highlights the importance of doing something many of us don’t: Always review your statement. While it may be a bit of a tedious process, it could save you thousands of dollars if someone has gotten ahold of your financial information and is using it to make fraudulent purchases. Even more importantly, reviewing your statement regularly can help you identify signs of identity theft (i.e. that someone is pretending to be you to get credit and bank accounts and make purchases).
If you spot a charge you don't recognize, don't panic. Just follow these simple steps:
- Take some time to mentally review your recent purchases and see if you can match the charge to a transaction.
- If you have authorized users tied to your card, check with them to see if they made the purchase. If you still can't identify the charge, it's time to take action.
- Contact the merchant to inquire about the charge.
- Finally, if the above steps don’t clear up the unknown charge, contact your credit provider immediately to explain that you don’t recognize the purchase.
- You may also want to consider locking the card until the incident has been resolved.
How to dispute a transaction
If you've identified an unauthorized charge on your credit card statement, you can dispute the transaction with your credit card issuer. While each company may have a slightly different process, there are some common steps:
- Contact your credit card issuer: Reach out to your credit card issuer as soon as possible to report the unauthorized charge. They will guide you through the process of disputing the transaction.
- Provide documentation: Be prepared to provide documentation to support your dispute, such as receipts.
- Wait for the investigation: Your credit card issuer will investigate the disputed charge and may issue a temporary credit to your account while they do so, with the understanding that, if the dispute is not resolved in your favour, you’ll be responsible for the expense.
- Follow up: Follow up with your credit card provider to ensure that the issue is resolved and that your account is secure.
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How to stay on top of future charges
As noted above, it’s vital to review your credit card statement, regularly. Better yet, rather than just waiting to get your statement in the mail or via email each month, review your credit card charges online once a week or so, to catch a potential erroneous charge as soon as it happens so you can resolve errors, quickly.
Furthermore, some credit card companies offer alerts or notifications for purchases, which can help you quickly spot any suspicious activity. If your card is lost or stolen, report it immediately and lock your card (which you can often do online) to prevent unauthorized charges.
FAQs
How do you find out where a charge came from?
If you find yourself wondering “what is this charge on my credit card?,” the best way to find out where it came from is to contact the merchant who posted the purchase. If that doesn’t work, reach out directly as soon as possible to your credit card provider to get more details about any questionable charges.
How do you cancel a credit card transaction?
If you’ve just made a purchase, it may be possible to cancel the charge if you do so within a short period after making the purchase (and you have a valid reason for wanting to cancel it). Each individual merchant will likely have its own cancellation policy. If the merchant won’t let you cancel and you have a legitimate reason for wanting to reverse the purchase (like the item never arrived or was faulty in some way) your credit card provider may be able to help you reverse the charge in some exceptional cases.
How can I protect my credit card from unauthorized purchases?
There are numerous things you can do to protect yourself against unauthorized purchases.
- Only add authorized users who you completely trust and that you know are responsible with money
- Constantly monitor your online credit card site so you can be aware of any questionable purchases as soon as they occur
- Always keep your credit card in a safe place and never share your PIN, card number or banking passwords with anyone
- Lock your card if you notice any fraudulent charges or you lose your card
- Contact your credit card company to see if they offer any kind of fraud alert or purchase alert services
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Sandra MacGregor has been writing about finance and travel for nearly a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star.
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