Dan's Blog Beating Automatic Credit Card Charges
Beating Automatic Credit Card Charges
Written by Dan Schaefer
Have you ever received a charge on a credit card that you thought you'd closed? Well, you're not alone. Credit card companies habitually re-open a previously closed account if someone issues a charge against it. And you are legally obligated to pay the charge, even though you closed the account!
I learned this lesson the hard way when I subscribed to an electronic greeting card service with an annual membership. After sending a few e-cards, I sort of forgot about the service. Subsequently, I closed the associated credit card account, only to have it re-open with a new charge a year later. The credit card company kindly explained to me that even though the account was closed, the e-card greeting service posted a new charge against the credit card, which automatically triggered re-opening the account. Further, a re-opened account may incur an annual membership dues charge along with the original charge. Worse yet, if you forget to pay on time, you'll end up paying even more.
So what can you do about unwanted automatic charges?
Through a fortuitous accident, I found an answer. Being a bonehead one day, I left my credit card at a Radio Shack near Boston. I discovered the loss a few hours later when I was on my way to the airport, so I immediately called the credit card company and told them of the loss. In turn, they issued a new credit card number to me and black-listed the old credit card number. That problem was solved.
But unknown to me at the time, another problem was solved as well. A few months later, I received an email from Classmates.com informing me that the credit card for my automatic annual membership had somehow failed to go through, and would I kindly give them new credit card information so they could renew my membership. I was angry because they made no attempt to inform me that they were going to renew the membership in the first place; instead, they tried to slip under the radar and charge my account before I could decide whether or not I wanted another year of membership. But the initial anger quickly dissipated when I realized that they were unsuccessful. Suddenly I found myself getting notifications from other companies as well, and before long, I concluded that I'd stumbled into something quite useful. I was in the proverbial "driver's seat," where I could decide what memberships I wanted to keep and what memberships I could punt.
Bottom line: Closing a credit card account does not protect you from automatic annual renewals from companies angling for a yearly handout. On the other hand (wink-wink), losing your credit card can sometimes work to your advantage.
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