Consumer Watch: Avoiding the automatic debit pit

Keeping a list of all the businesses you let automatically debit your account is an important part of your budget (KOKH). 

Subscriptions are more than just for magazines, and though they might make life easy in some ways, they may also hurt your finances.

From apps, to clothes, and even make up. There is a subscription for everything. Many consumers might lose track, but there are ways to steer yourself back into the right direction.

It used to be a common tactic used in infomercials, but now it's used with online ads. The offer is to try an up and coming product for free, but the business still needs your credit card information. That’s because in some cases you are signing up for a subscription.

What's the harm? You may be given something like 14-days to cancel the subscription at no cost to you, but that time period isn’t as generous as it seems.

“You have like 14 days to try it but you didn't get it for three days so if you haven't cancelled in that three days you are stuck, and then it is very expensive on your card,” says Elaine Dodd, Oklahoma Bankers Association, Fraud Division.

Automatic debit for online subscriptions do save time, but they can sometimes be difficult to cancel. Consumers can be left feeling scammed, but the information was made available in that fine print you might have skipped over.

“What people need to do is read the fine print -- to know what you are signing up for so you are not stuck in a contract that is hard to undo,” says Dodd.

If you are interested in trying out a subscription, you can also try reading the comments on their social media pages. You'll be able to hear from other users about whether or not the subscriptions are difficult to cancel.

Even subscriptions you intend to have for a long time can get out of hand. If we are talking about an $12.00 a month video streaming app you aren't often using, automatic debit might make you forget your paying all together. It's important to keep track of every business you have allowed to automatically debit your account.

If you are participating in a free trail, try setting an alarm to cancel something before you are charged. It's difficult and unlikely you'll get your money back after your account is charged.

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