Credit Cards More Popular Than Checks

Americans now use automatic debit or credit card payments more than checks to pay their bills. While the convenience and payment schedules benefit customers, it is important to know how to cancel automatic payment arrangements. According to a recent story in the Wall Street Journal, consumers don't always understand the rules for stopping recurring payments. If automatic payments aren't canceled correctly, the debiting may continue on the account and it may be difficult to get the money back. Banks are sometimes unable to stop recurring credit card charges from a long-term contract such as a gym membership or a mortgage payment.

To cancel automatic payment, submit your request by phone and in writing to the merchant and bank or credit card company at least 3 days before the payment will be debited. Include your account number and how much is being charged (also include merchant name in letter to the bank/credit card company). If the charges appear after the account is canceled, you have 60 days after it shows up on the statement to dispute it.

If you run into difficulties with the account being debited after the it has been closed, contact your state's Attorney General's office, the Better Business Bureau or the Federal Trade Commission (FTC).