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Thanks to a hidden banking system that tracks your financial life, canceling your credit card won't stop streaming services from charging you.
Millions of Americans pay for Netflix, doling out anywhere from $6.99 to $22.99 a month. It’s a common belief that you can get out of recurring charges like this by canceling your credit card. Netflix won’t be able to find you, and your account will just go away, right? You wouldn’t be crazy for believing it, but it’s a myth that canceling a credit card will stop your recurring charges.
Nearly 46% of Americans opened a new credit card last year, according to Forbes, which means millions of Americans also canceled old ones. When you switch cards, Netflix doesn’t just stop your service — they just start charging your new card. There’s a largely hidden service that enables Netflix and most other subscription services to keep throwing charges at you indefinitely.
“Banks may automatically update credit or debit card numbers when a new card is issued. This update allows your card to continue to be charged, even if it’s expired,” Netflix says in its help center.
You can thank Visa for this. In 2003, Visa U.S.A. started offering a new software product to merchants called Visa Account Updater (VAU), according to a 2003 American Banker article. The service works with a network of banks to create a virtual tracking service of Americans’ financial profiles. Whenever someone renews, cancels, or opens a credit card, banks automatically update the VAU. This system lets Netflix and countless other corporations charge whatever card you have on file. It’s a seamless switch that allows the dollars to keep flowing toward corporate America, while you don’t have to lift a finger.
gizmodo.com
Millions of Americans pay for Netflix, doling out anywhere from $6.99 to $22.99 a month. It’s a common belief that you can get out of recurring charges like this by canceling your credit card. Netflix won’t be able to find you, and your account will just go away, right? You wouldn’t be crazy for believing it, but it’s a myth that canceling a credit card will stop your recurring charges.
Nearly 46% of Americans opened a new credit card last year, according to Forbes, which means millions of Americans also canceled old ones. When you switch cards, Netflix doesn’t just stop your service — they just start charging your new card. There’s a largely hidden service that enables Netflix and most other subscription services to keep throwing charges at you indefinitely.
“Banks may automatically update credit or debit card numbers when a new card is issued. This update allows your card to continue to be charged, even if it’s expired,” Netflix says in its help center.
You can thank Visa for this. In 2003, Visa U.S.A. started offering a new software product to merchants called Visa Account Updater (VAU), according to a 2003 American Banker article. The service works with a network of banks to create a virtual tracking service of Americans’ financial profiles. Whenever someone renews, cancels, or opens a credit card, banks automatically update the VAU. This system lets Netflix and countless other corporations charge whatever card you have on file. It’s a seamless switch that allows the dollars to keep flowing toward corporate America, while you don’t have to lift a finger.
Canceling Your Credit Card May Not Stop Netflix's Recurring Charges
Thanks to a relatively unknown banking system that tracks your financial life, canceling your credit card may not stop streaming services from charging you.
gizmodo.com
