How Your Credit Card Can Save You If You Forgot to Cancel Your Free Trial
The pandemic has had a significant impact on how Americans spend their money. In April, the New York Times reported sharp cuts in travel, shopping and restaurant spending. But other areas, such as food and subscription services, are seeing growth.
As homebody orders cancel events, people are spending more and more on home entertainment. Services like Netflix , Disney Plus and xBox have grown significantly since the start of the pandemic. Subscriptions for coffee and meal kits have also skyrocketed.
Many services offer a free trial, so it’s tempting to sign up. However, it can be difficult to remember when a promotional offer expires and you may be charged before you figure it out. Fortunately, there is another way to fix this problem if you find it difficult to set reminders – the protection provided by your credit card.
The best solution comes from Visa. A new company policy , effective in April, protects you from hidden subscriptions by requiring companies to inform you before they start charging you.
After you sign up for an offer, Visa requires companies to send you an email or text message with the terms of the agreement. They should also send you a clear reminder prior to the end of the trial period, along with cancellation instructions.
While Mastercard and AmEx have their own policies, neither offer the same level of protection. AmEx makes it easy to dispute a payment, but does not take a proactive approach with subscription reminders. Mastercard requires companies to alert you prior to the end of the free trial and provide you with the option to cancel. However, this will not protect you from digital subscriptions: the policy only applies to subscriptions to physical products such as skincare or healthcare.
In times of growing uncertainty, you can look for ways to save every dollar possible. While the FTC has tried to limit auto-renewals , companies still make money from people who forget to cancel their subscriptions after free trials. The best way to stay out of trouble is to always set a reminder (or two!) So you can unsubscribe well ahead of the deadline.