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How to Break the Curse of the Monthly Recurring Credit Card Charges

Credit Card Basics, Credit Cards
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Of all the pet peeves we collectively carry, one of my most peevish is signing up for a service without realizing – or forgetting – that my credit card will get charged every month until the zombie apocalypse or I cancel that charge, whichever comes first.

The trick with recurring charges is something I call “Ostrich Syndrome.” If you’re like me, you sign up for something, make a mental note to cancel it a month later, and completely forget about it or so de-prioritize it. Then when your credit card statement arrives, you smack your forehead, thinking, “Argh! I forgot!” And the whole cycle repeats. The bottom line here is that ultimately it’s on you to cancel the plan, not on the company.

So let’s have a look at some types of recurring charges and the relative difficulty of canceling those you wish.

Canceling can be easy — or not

First, recognize that many goods and services that have monthly subscriptions are completely legitimate. The best ones have a “cancel my subscription” button on the front page of the website or, at worst, under “my account.” Others might hide it somewhere that isn’t obvious. Still others conceal the information, and it requires a phone call during limited hours in which you can call to cancel. The less transparent a cancellation option is, the more likely it’s a company you should be cautious about doing business with in the first place.

The FTC requires “affirmative consent” for monthly charges, so the good news is that you are only being legally charged if you willfully clicked the box authorizing such charges. If you did not specifically opt-in for the recurring charge, then the company may be in violation of FTC rules, which may make it easier for you to get your money back via a chargeback on your credit card. This is called a “forced continuity” charge. You need to act quickly, though, as the law gives you 60 days to dispute an unauthorized charge.

» MORE: When is the best time to pay my credit card bill?

How to keep from falling into recurring traps

As for things to watch out for, one of the big red flags is being offered a “free trial.” There’s often fine print, which says that you’ll be charged a monthly fee after your “free trial period” expires, which may be as little as three days. These often appear as pop-up ads following a purchase on a website.

Also, the Internet is your friend when it comes to signing up for any kind of service or purchase. Just do a search for that company’s name, along with words like “recurring charge,” “unauthorized charge” or my personal favorite, “scam.” People are vocal about unauthorized charges. You’ll know right away whether the company is a hero or a zero.

Learning from experience

Here are two examples from my network.

Almost every online dating site has a monthly charge, or one that renews every quarter or year, depending on which subscription you choose. Some make it more difficult than others to cancel. You may have to dig through a few menus to even find the instructions. In fact, it’s sometimes faster to do an Internet search for “how to cancel my membership in X.” Few of these services actually remind you that your subscription is about to end and will be renewed.

Memberships in virtual worlds for kids, a wholly different matter, can be a bit more cancellation-friendly. Club Penguin, for example, sends a notification a few days before a subscription renews. Others, however, are not so kind. Generally, however, finding the cancellation button is a lot easier than dating websites.

Zombie sign via Shutterstock