Should I Worry About Those Random $1 Charges On My Credit Card?

It can mean credit card theft, but there are legitimate reasons for them to appear on your statement, too.

Anisha SekarNovember 12, 2013
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If you've been previewing your credit card statements online, you’ve might have noticed a random $1 charge among your list of purchases by now.

Some fraudsters do a trial run on victim's credit cards, charging $1 to see whether anyone notices before they run up larger charges. But sometimes, a $1 charge is legit - at least temporarily.

Where Do Those $1 Charges Come From?

If you look at your list of pending purchases, you’ll probably discover that a random $1 charge bumps right up against a charge from a gas station, hotel or rent-a-car company. That's because the $1 charge is actually a temporary preauthorization from your credit card company, basically giving the merchant the green light to charge your card for the full amount when your final purchase is made. By preauthorizing your card $1, they don't have to place a larger hold against your account.

The $1 charge disappears when the final amount you’ve spent at a hotel or gas station is no longer pending – the preauthorization is lifted and the $1 charge doesn’t show up on your final statement.

Why Do I Only See It With Certain Purchases?

Why some retailers require pre-authorization and some don't: Certain retailers – gas stations, hotels and rent-a-car companies – don’t yet know the final cost of your purchase when they accept your card. For instance, when you initially swipe your card at a gas pump, the station doesn't know how much it'll take to actually fill your tank. That's why the merchant pre-authorizes your card; that way, they'll be pretty sure that you won’t charge more than your credit limit will allow.

When Should I Worry About a $1 Charge?

The $1 that’s charged to your card when you rent a car or stay at a hotel should automatically drop off of your account when your final purchase shows up on your statement. In fact, once the final charge is no longer pending, you shouldn’t see the $1 charge anymore. That $1 doesn’t ever come out of your pocket.

But if you notice that the $1 doesn’t automatically disappear or you see $1 charges showing up on your final credit card statement, it’s time to get in touch with your bank and check what's going on.

The takeaway: Those funny little $1 charges that keep popping up on your credit card account are usually nothing to worry about, and they should disappear before you’re required to make a payment. Just be sure to not to ignore any unauthorized $1 costs that stick around. Respecting your money means not paying for anything you didn’t actually buy, even if it’s just a buck.

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