What is this charge on my credit card?

The charge on your credit card statement that you don’t recognize could be a purchase you made that just seems unfamiliar given how the merchant is listed, a fee charged by the card issuer, an unauthorized transaction, or a mistake. Fortunately, all major credit cards give a $0 liability guarantee for unauthorized charges.

It’s still best to report unauthorized charges quickly, however, and  take other steps to make sure you don’t become a victim of full-blown identity theft. This begins with investigating unfamiliar charges for potential credit card fraud.

Ways to Look Up Unfamiliar Credit Card Charges

1. Research unknown charges online.

Use a search engine to look up the description of the charge from your credit card statement – exactly as it appears. Generally, transaction data is limited to 25 characters, which may contain unusual abbreviations, store numbers, and other unrecognizable information. Plugging that info into an internet browser could return results that make the source of the purchase clearer.

For example, you might see the following on your credit card statement: "PP*APPLE.COM/BILL." Searching this online should help you remember that it’s a PayPal purchase for Apple content made through the App Store.

2. Contact customer service.

Call the number you see on the back of your credit card to see if your card’s issuer has a search tool or document with a list of Merchant Category Codes (MCC), which businesses are assigned for credit card transactions. For example, a seemingly random $3 charge might not make sense when you see it on your statement, but if you call customer service, they might be able to help you determine that it was a payment at a toll road, based on the code assigned to the charge.

3. Check with the merchant.

Reach out to the store you did business with on the date of the charge and ask them how their company name shows up on credit card statements. It’s possible the purchase is showing up on your statement under the name of the store’s parent company.

Pre-Authorization Charges and How They Work

Some purchases require a pre-authorization, which will appear as a small charge on your account, typically between $1 and $5. These usually appear for certain types of transactions, such as gas purchases and streaming service subscription payments, for example. Once the actual transaction posts, the pre-authorization charge should go away. This is normal.

On the other hand, there are times when small charges on your credit card could be a sign of fraud. Scammers may attempt to charge small amounts to your account to see if the card works. If the charge goes unnoticed, the fraudster may attempt to make a large purchase on your account.

Keep in mind that you have some recourse for mistakes and other unfamiliar transactions that end up on your credit card bills: You can dispute charges you don’t recognize. Depending on the issuer, you can file dispute claims over the phone, online, or by mail. But before contacting your credit card’s issuer, contact the merchant first.

What You Should Do Before Disputing a Credit Card Charge

• Credit card companies will investigate disputed charges, so it’s a good idea to retrace your steps before you act.
• Go through all your receipts from that timeframe to make sure you didn’t simply forget about a purchase you authorized.
• If you come up empty-handed, call the merchant. It could be an honest mistake, and the merchant can reverse the charge.
• There’s always a chance that the erroneous charge is from your credit card issuer, not a merchant. If you suspect that your card issuer has mistakenly charged you a fee, you should take it up with a customer service rep at your credit card company.

What to Do If You Didn’t Authorize the Charge

If you’ve tracked down the merchant responsible for the unrecognizable charge, but you did not authorize the charge, you may be a target of credit card fraud. You should report it to your card issuer immediately by calling the number you see on the back of your card or logging into your online credit card account. Your card issuer will likely cancel your credit card and send you a new one. You won’t be responsible for paying the unauthorized charges.

With all the credit card fraud in today’s financial environment, finding an unfamiliar charge on a credit card statement can be alarming. But it doesn't have to cost you any money. You can also minimize the threat by doing things like reviewing your credit card statement every month and keeping track of charges as they post to your account online.