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How to cancel an automatic debit payment on your credit card

Always check if your request to cancel has been implemented.

Setting up a recurring automatic payment from your credit card can be a convenient way to keep up with monthly expenses, such as phone bills or Internet subscriptions. However, if you no longer wish to make payments for specific services, canceling the automatic payments is your only option.

Why would I need to cancel a direct debit payment?

Automatic debits can simplify how you make payments, but there are instances when you might want to put a stop to one or more direct debits. Some of the most common reasons include:

  • Change in income.
    Canceling a service can help you minimize expenses, or you can upgrade to a more expensive service.
  • Cancel a subscription.
    Some subscription services you may want to cancel are magazine subscriptions, charity, online streaming services or gym membership.
  • Moved house.
    You’ve moved to a new area and you want to stop payments to previous utility providers.
  • Cancel a service you no longer want.
    You want to cancel an automatic payment you signed up for in haste or unwittingly.

How do I cancel my direct debit payment?

By Federal law, you have the right to stop any company from taking payments from your account.

The steps to cancel an existing automatic payment from your credit card are:

  1. Call or write a letter to the merchant who has the automatic payment authority and tell them you’re revoking authorization for them to take payments from your account.
  2. Contact your provider and inform them of the change or send a copy of this letter to your credit card issuer. Inform them you’ve revoked authorization from the company.
  3. Give your bank a stop payment order, meaning the bank won’t allow the merchant to take any more payments from your account.
  4. Check with the financial institution in a few days to establish if it has canceled the automatic payment.

Finder tip

If the bank doesn’t want to honor your request, you can file a claim online with the CFPB or call them at 855-411-CFPB extension 2372.

How to write a letter to cancel a direct debit payment

If you decide to write a letter or email to cancel your automatic payment, you’ll need to include the information of the payment and the account you’re referring to.

Bear in mind that canceling a direct debit in the middle of a contract term can come with repercussions, so it’s best you get legal advice in such a situation.

The letter below is a sample provided by the Consumer Financial Protection Bureau.

Sample letter for canceling a direct debit on your credit card

Must read:

[Your Name][Your Address][DATE][Bank/Credit Union Name][Bank/Credit Union Address]

RE: Revocation of authorization for electronic debits

To Whom It May Concern:

[Company name] no longer has my permission to take automatic debit payments from my bank account. I have revoked the authorization that had enabled this company to debit my account via electronic funds transfer.

My Name: _________________________
Checking Account Number: ___________________
Payee Company Name:______________________
Account number with Payee Company:________________________

(If you have the information, provide):

Payment amount or range of amounts: __________________
Date[s] the schedule payment[s] appeared on my account statement: _______

Specifically (select one):

_ I have revoked authorization as of ______ date for any future debits by [Company name].

_ I have revoked authorization as of ______ date for the next scheduled debit by [Company name]. I have not revoked authorization for other debits.

Sincerely,[Your Name]

____________________ ___________________
Signature Date

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What else should I be wary of when canceling automatic payments?

Canceling an automatic payment linked to your credit card is not particularly difficult, but there are some conditions to remember before you go ahead:

  • Breach of contract.
    You could be in breach of contract if the automatic payment you wish to cancel comes linked to a product or service you’ve purchased and have to keep making payments on for a given time period. Make sure you continue to make payments manually to avoid any legal consequences.
  • Implementation of instructions.
    It’s not always a guarantee that your request to cancel an automatic payment has been implemented correctly by the provider. Go through your credit card statements carefully to check if the debits in question have stopped.
  • Time limitations on chargebacks.
    If your credit card provider doesn’t cancel your payment, contact it as soon as possible to get a reversal on discrepant charges. This is because card providers have different time limits in place when it comes to processing chargebacks, so the sooner you set those wheels in motion, the better.

Bottom line

To cancel an automatic payment from your credit card, contact the merchant and your credit card provider. Instruct them to cancel the payments in question. Whether you do this over the phone or in writing, make sure to keep an eye on your account to ensure your bank did indeed cancel the direct debit.

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