Can a Merchant Charge a Cancelled Credit Card?


Credit cards on the table

We all work so hard to make ends meet, operating two to three jobs to ensure that we put food on the table. Making money has never been easy, which is why we get furious when we are being charged for something we don’t want. One of the most popular ways this happens is when we cancel a credit card but still get charged by the merchant. This often raises the question, can merchants take money from your card even after cancellation?

Merchants can still charge a cancelled credit card, especially if the contract you signed is still on course. Cancelling the credit card wouldn’t stop charges against you and stopping payments while still in contract could land you in trouble.

It happens frequently. Mr Albert feels a cell phone company is ripping him off, so he decided to cancel the credit card linked with the company or merchant and end his affiliation with them. However, he one day discovers that the cell phone company is still charging him even after cancelling his credit card. If this happens to you, I have the answers you seek. I can’t guarantee that it’ll quell your rage, but it’ll provide more clarity. All you have to do is pay attention.

Can a Merchant Charge a Cancelled Credit Card?

How do you feel when you see an unauthorized transaction from a merchant you thought you dumped? Do you feel Frustrated? Confused? Sad? Furious? Or all of the above? Well, I am sure you’ll be frustrated and maybe confused. But you see, this is what a few, if not most people face – especially those who signed up for recurring billing. Now, don’t get me wrong, recurring billing has its benefits, but when you start paying for a service you don’t want, it’s best to say, its cons have outweighed its benefits.

When you sign up to recurring billing, the merchant has the right to make recurring charges to your account without further consent. Sometimes, people decide to ditch the merchant for one reason or another. And they feel the best way to do this is by cancelling their credit card. But, it is important you note that, when you cancel your credit card while the contract with your merchant is on, they’ll still charge your new credit card. Why is this so? You may ask.

You see, provided a contact still exist between you and the merchant, you have no choice but to continue payment till the contract is over. After the contract has expired, you may need to notify the merchant of your intention to pull out before they stop charging your credit card. Mind you, if you are required to provide notice before you back out, you may have to make one more payment. That’s simply how it works.

Why Can’t Credit Card Companies Stop Charges Made on a Cancelled Credit Card?

When we find cheaper alternatives to a service we registered for, we are often compelled to jump ship. Most times, we don’t follow the right channel. We simply cancel the credit card to which the former merchant was link to, collect a new one and move on with our lives. However, we soon discover that the former merchant is still charging our credit card and we ask ourselves why the credit card company refused to stop the charges.

A credit card company can’t stop charges made on a cancelled card because the agreement isn’t between you and the credit card company, instead it is between you and the merchant. So any effort to cancel the payment without following due protocol could be termed illegal.

When it comes to your credit card, there are certain things credit card companies can do, and there are also some certain things they are restricted from doing. They aren’t the superior when it comes to matters regarding your credit card payments. They all adhere to guidelines from the U.S Office of the Comptroller of the Currency amongst other agencies.

Some people go ahead and close their account but still discover that the merchant is still charging them. The best way to scale through this is by notifying the credit card company in writing that you have terminated the agreement with the merchant. The company may request a proof, so ensure that you have the necessary proof to validate your claim.

What if the Merchant Keeps Charging Your Credit Card Even After Requesting a Recurring Payment to Be Stopped?

Some unscrupulous merchants will keep on charging your credit card even after your contract has ended and you’ve requested that they stop taking payment from your card. This scenario can be annoying because it is similar to a fraud case. If you are in this situation, what do you do? Do you cancel your credit card, report them to the credit card company or just expect it to end?

If the merchant keeps charging your credit card after asking for a recurring payment to be halted, you’ll have to take further action. First off, write to your card issuer and request that the payment be halted immediately. Also, send an automatic payment termination letter to your lender billing inquiries address with a certified mail.

Rarely will a merchant keep charging your credit card after your contract is over and you have requested that they stop. However, not all merchants are honest. So, if something of this sort happens, take the necessary steps. And don’t fret when doing so because you are entitled to protection from this unethical action under the Fair Credit Billing Act.

If matters get out of hands, you can simply get in touch with your local Better Business Bureau, including your state’s attorney general to make complaints about the merchant. However, before you take this step, ensure that you haven’t disregarded the contract between you and the merchant. And always take note of contract requirements before signing so you don’t end up in trouble.

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