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How To Cancel Pre-Authorized Payments On Credit Cards


How To Cancel Pre-Authorized Payments On Credit Cards
Reading Time: 4 Min

Pre-authorized payments, also known as recurring charges, are automatic payments deducted from your credit card at regular intervals. These payments are commonly used for subscription services, gym memberships, utility bills, and other recurring expenses. While pre-authorized payments can be convenient, they can also become a burden if you no longer need the service or want to change your payment method. 

This article outlines how to cancel your pre-authorized credit card payments, including information on how pre-authorized payments work and how to troubleshoot issues with the cancellation process. 

Whether you’re cancelling a subscription or don’t like the thought of money automatically leaving your account, this article can help.

How Do Pre-Authorized Transactions Work?

Pre-authorized payments are set up when you provide your credit card information to a merchant or service provider and authorize them to charge your card on a recurring basis. The terms of service or contract typically outline the frequency and amount of charges for pre-authorized payments. 

The main difference between pre-authorized payments and regular credit card payments is that regular credit card transactions require your approval each time, while pre-authorized transactions can be deducted without your approval.

Steps To Cancel Pre-Authorized Payments On A Credit Card

It can be challenging to cancel a pre-authorized payment, and the process needs a proactive approach. Below, we outline the steps you need to take to cancel a pre-authorized transaction: 

  1. 1. Contact your merchant or service provider: Call the merchant and let them know you want to cancel the pre-authorized payment. Different merchants will have different cancellation policies, so be mindful of their specific terms by reviewing their website or the contract you signed with them. In some cases, online cancellation options are available. 
  3. 2. Provide the correct account details: Give your merchant or service provider all the necessary information, such as account details, personal details and your reason for cancellation. During this process, remain polite but assertive to ensure the process goes smoothly. 
  5. 3. Notify the credit card issuer: Let your credit card issuer know you cancelled a pre-authorized payment. This will ensure that your credit card issuer can alert you if unauthorized charges come through. 
  7. 4. Monitor your credit card statements: Keep an eye on your credit card statements to ensure no unauthorized or unexpected charges come through. If it does, contact your credit card issuer to report and dispute the issue.
  9. Your merchant may be hesitant to cancel your pre-authorized charges. Therefore, it’s important to be polite but firm and ensure that everything is done according to protocol to avoid future disputes.

How To Resolve Challenges Around Cancelling Pre-Authorized Payments

Cancelling a pre-authorized payment is not always straightforward, and you may encounter several common errors and obstacles. Below, we outline the most common challenges around cancelling pre-authorized payments and how to resolve them:

  • Difficulty reaching the merchant or service provider: Some companies may have limited customer support hours or may not provide clear contact information. In such cases, persistence is key. Keep trying different contact methods, such as phone calls, emails, or live chat until you reach someone. 
  • Cancellation fees or penalties: Some merchants may impose cancellation fees or penalties for terminating pre-authorized payments before a certain period. Firstly, be aware of these fees. If you believe the fees are unreasonable, you can negotiate with the merchant or escalate the issue to upper management.
  • Payments continue even after cancellation: In some cases, merchants may continue to charge your credit card even after you have cancelled the pre-authorized payments. This can be due to technical issues, processing delays, or deliberate attempts to charge you. In this case, contact your credit card issuer and get your money back. They will be able to investigate the issue further.

It may be stressful when you cannot cancel a pre-authorized payment straight away. Take care to remain calm and patient. Most of the time, the issue will be easy to resolve.

Alternatives To Pre-Authorized Payments

If you don’t like the idea of setting up a pre-authorized payment, there are alternative payment methods that can work just as well without sacrificing any of the convenience:

  • Manual payments: Instead of setting up automatic payments, you can choose to make manual payments each month. This allows you to review your expenses and ensure that you only pay for the services you need.
  • Online bill payment: Many banks offer online bill payment services that allow you to pay your bills directly from your bank account. This eliminates the need for pre-authorized payments and gives you control over when and how much you pay.
  • Payment apps: There are various payment apps available that allow you to make payments directly from your smartphone. These apps often provide additional features, such as expense tracking and budgeting tools. 
  • Virtual credit card numbers: Some credit card issuers offer virtual credit card numbers that can be used for online purchases. These numbers are separate from your actual credit card details and provide an added layer of security.

The main issue with these methods is the lack of automation. Luckily, you can easily set up monthly payment reminders to ensure you pay your bills on time while maintaining control of your finances.

Final Thoughts

Cancelling pre-authorized payments can be tricky. Unwilling merchants, technical issues, and slow processing times can lead to frustration and unnecessary credit deductions. It’s vital to be proactive and ensure you contact your merchants and credit card issuers directly with any issues. This will allow you to take direct control of your finances and avoid complications further along the line. As always, be careful who you give your credit card information to, and don’t hesitate to reach out to customer service with any complaints.

Author Bio

Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook. Read his full author bio

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