22 Aug, 2017, 08:45 ET
AUSTIN, Texas, Aug. 22, 2017 /PRNewswire/ -- Paying your bills has gotten easier over the years thanks to online banking and payment services, but buyers should beware. More than 1 in 3 Americans (35%) say they have signed up for a subscription or membership, such as a gym, that enrolled them in an automatic payment plan without even realizing it, according to a new study by CreditCards.com. When respondents found themselves in this situation, only 11% kept the autopay turned on, while 89% chose to turn it off. Only about half of those surveyed found it easy to cancel an automatic payment (47%). Click here for the full list:
People often sign up for auto-pay programs for services as a convenience or to ensure that they don't miss a payment. However, many times the payment plan is not obviously stated and consumers continue with a service they did not plan to extend. Gen Xers, ages 37-52, are more likely than any other age group to have fallen victim to unwanted auto-pay programs and more than 2.5 times that of people ages 72+ (17%). Parents are more likely than non-parents (43% vs. 32%) to be unwittingly enrolled in such a program. And, people with higher education and income levels are more likely to have been enrolled in an unwanted auto payment plan compared to respondents who make less than $30,000 per year and have an education level of high school or less.
"Bottom line, it's important to read the fine print when you're signing up for a new subscription or service," said Matt Schulz, CreditCards.com's senior industry analyst. "Unplanned recurring payments can wreak havoc on your budget and your bank accounts."
Oftentimes, these accounts start as a free trial that is automatically renewed and suddenly the consumer is hit with an unexpected payment. 48% of respondents say they were unknowingly charged for a subscription when the trial period ended and the auto-renewal was activated. Gen Xers (56%) and Younger Boomers (57%), ages 53-62, were most likely to have had this happen to them. 88% of consumers opted to cancel the subscription when this occurred. However, just over half of those respondents (51%) received a refund.
The survey was conducted by Princeton Survey Research Associates International. PSRAI obtained telephone interviews with a nationally representative sample of 1,002 adults living in the continental United States. Interviews were conducted by landline (501) and cell phone (501, including 303 without a landline phone) in English and Spanish by Princeton Data Source from August 3-6, 2017. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 4.0 percentage points.
CreditCards.com is a leading online credit card marketplace, bringing consumers and credit card issuers together. At its free website, consumers can compare hundreds of credit card offers from America's leading issuers and banks and apply securely, online. CreditCards.com is also a destination site for consumers wanting to learn more about credit cards. Offering advice, news, features, statistics and tools, CreditCards.com helps consumers make smart choices about credit cards. In 2016, over 35 million unique visitors used CreditCards.com to find the right credit card to suit their needs.
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Kayleen (Katie) Yates
VP, Corporate Communications
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