Many of us have been there: you sign up for a free trial and intend to cancel before the first bill arrives. However, you completely forget and discover a charge on your credit card statement.
“Everybody's to-do list is 100 miles long and everybody forgets things every once in a while, and it's really a bummer when you forget something and end up having to pay because you forgot,” he said.
He’s happy about Mastercard’s announcement: when you sign up for a free trial, they’ll require retailers to notify you before sending the first bill.
However, it’s only for physical products.
“So, if you're in a wine of the month club or something like that, you will be covered but if it's a streaming service like Netflix or Hulu or something like that, that won't be covered,” Schulz said.
Schulz suspects this is just a first step towards broader consumer protections and other card companies might follow suite.
Mastercard’s change will go into effect sometime this year but they haven’t set a date yet.
In the meantime, enlist your smart phone’s calendar to help manage subscriptions.
“Go ahead and make that reminder for yourself right when you sign up for that subscription so it's front of mind and you will be reminded about it before you're stuck having to pay,” Schulz said.
The Better Business Bureau has been studying what they call free trial "traps." A trial that looks legitimate, but there’s fine print that reads, once you sign up for the free offer, you’re committing to a monthly subscription.
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