Your credit card now has you covered if you forget to cancel a subscription service
2020 has been the year of streaming and subscriptions. For months, U.S. consumers were at home relying on subscription-based services as their main source of entertainment. With the travel outlook remaining depressed through the rest of the year, streaming and other at-home leisure activities will continue to remain higher than usual.
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There are hundreds of different subscription services, including streaming, that prospective customers can choose from. With many of those services offering free trials or limited-time promotions, it's easy to sign up -- and completely forget. However, you actually could be covered. It just depends on what credit card you're using.
Related reading: Amex provides limited-time streaming credits, other perks
An era of subscriptions -- and the ensuing fatigue
A recent study from Deloitte highlighted just how prevalent streaming and subscriptions have become -- and perhaps how it's reaching a saturation point for users. Prior to the pandemic, the average U.S. consumer had 12 paid entertainment subscriptions. However, even more telling is that Millennials -- who average 17 subscriptions -- were said to be "overwhelmed" by the number of subscription services they manage, with 43% intending to reduce them.
That's not a surprise, since nearly a quarter of subscribers said that "a free or discounted rate" was a significant factor in choosing a paid streaming video service. Subscribe, binge that one series and then cancel.
However, if you happen to forget that last step, the card that you used might have your back.
Related reading: Chase adds limited-time bonuses on streaming, other categories
The credit card policies
The major credit card networks -- Visa, Mastercard, and Amex -- have policies to protect consumers from unscrupulous subscription tactics. Each network's policy differs somewhat, but the general takeaway is that you need to be notified or give consent before being billed for recurring transactions. However, there is a huge caveat for Mastercard purchases.
Visa card policy
In April, Visa announced a new policy intended to help consumers better manage recurring payments for free trials. If you sign up for a free trial with a subscription service, the merchant must notify you with an email or text you of the following:
- Confirmation of the terms of the agreement
- Proactive announcement of future payments towards the end of the trial period
- Instructions on how to initiate a cancellation
Visa says that this policy benefits consumers since it "will help to ensure that [they] have greater transparency, choice and control over their subscription payments."
Related reading: Guide to the best Visa cards
Amex card policy
Amex has been known for siding with its cardholders when disputes with merchants arise. An Amex spokesperson also told TPG that the company has had "long-standing rules aimed at ensuring merchants provide proper notice to our card members of recurring charges on their cards."
The issuer asserts that merchants must obtain consent before submitting recurring billing and provide notification that cardholders can, in fact, cancel. Finally, Amex requires that merchant contact details are included and they act to cancel requests immediately. "We work to ensure that the cancellation process for recurring billing is simple and fast for our card members," the Amex spokesperson stated.
However, unlike Visa, it appears Amex doesn't require a merchant to remind consumers -- either through email or text -- about a trial period ending before billing begins.
Related reading: The best Amex cards of 2020
Mastercard policy
In 2019, Mastercard created a policy to protect consumers after free trials ended. The catch? It only applies to physical products, not digital services such as streaming.
"No one wants to be unsatisfied with a physical product after paying for it. For some consumers, a free trial is a great way to test out a new product and get comfortable with it before making a purchasing decision."
At a time when digital subscriptions are the norm rather than the exception, this policy seems a bit shortsighted. However, the good news is that for physical products, merchants have to notify you a free trial is ending before billing begins. Like Visa, this must be done over email or text and include merchant contact details.
Related reading: These are the best Mastercard credit cards
Bottom line
As consumers, we've likely all started free trials and wound up subscribing to something we didn't actually want. These policies help deter merchants from using those types of tactics.
With that said, none of the card networks will know at the time of charge whether the proper notification was made or not. Most likely, it would require a dispute. If there are enough complaints, that could be a violation of the merchant's contract -- and perhaps the card company could go to the extreme step of refusing to accept charges.
It's best to keep track of your trial subscriptions, but if you're like most Americans -- with a dozen or more services -- it's good to know that most cards will have your back in case you forget.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.