Free trials and auto-renewals for streaming services you no longer watch. Low introductory subscriptions that suddenly increase when you’re not looking. An exercise or meditation app that you never really use. Your credit cards and debit cards are being charged every month unless you take steps to identify and cancel unwanted subscriptions.
The Subscription Economy Is On The Rise
According to USA Today, the subscription economy has more than quadrupled over the last 10 years. When you think about it, you can see why. For many businesses, getting you to sign up for an auto-pay and auto-renew subscription is easier than marketing for repeat sales. Even worse – they’re betting on you forgetting to cancel and they’re correct.
A 2022 study conducted by C+R research found that 42% of consumers had forgotten they were still paying for a service they no longer use. And, on average, they underestimate what they spend on monthly subscriptions, considering the same study reports an average monthly estimate of $219. That’s over $2,600 per year that you could be saving for your retirement.
“Ironically, Rocket Money charges $4 for a monthly subscription to their cancellation service.”
Many Subscriptions Are Hard To Cancel
An article by Nerd Wallet reports that many subscriptions are hard to cancel by design. Some businesses require consumers to go to several links before finding the cancellation function while others require a call to customer service or a written request. And the Federal Trade Commission (FTC) has been paying attention.
In March 2023, the FTC proposed a rule called “Click to Cancel” that would require businesses charging for subscriptions to make it as easy to cancel a subscription as it is to sign up. The rule would also require an annual reminder be sent to consumers before auto-renewals kick in. Currently, the “Click to Cancel” rule is still pending.
How To Find Unwanted Auto-Pay Subscriptions
The easiest way is to check your credit card and checking account statements for recurring payments. You can also check the accounts you have with app stores you use like Apple Pay or Google Play to find a list of subscriptions you’ve purchased through those apps. Another option is to use a tracking app like Rocket Money that can find and cancel unwanted subscriptions. Ironically, Rocket Money charges $4 for a monthly subscription to their subscription cancellation service.
Let’s face it – if you put in the effort, you can find and cancel unwanted subscriptions yourself then add the money you save to your retirement nest egg. To learn more, connect with an FRC® trained advisor.
Source: https://www.crresearch.com/blog/subscription-service-statistics-and-costs
