Credit Card Updater Services May Result in Unexpected Charges

When MrConsumer received a replacement Visa debit card from his bank because the old one was about to expire, there was a small note inside:

*MOUSE PRINT:

“Visa Account Updater: Your Salem Five debit card now includes Visa Account Updater. This feature automatically updates your debit card information with participating merchants you have recurring payment relationships with when your card is renewed or reissued at expiration.”

In other words, if you have certain bills like utilities, cable, or mail order pharmacy on “autopay” meaning they automatically charge your credit card or debit card every month for the balance due, Visa will tell those merchants your new expiration date or card number whenever the card is replaced.

This is good in many respects particularly for people who don’t want to be bothered having to contact each merchant with the new information, and to avoid bills not being paid on time because the card expired.

But it could also pose a problem for cardholders who deliberately give a company a soon-to-expire credit card number because they don’t want the plan they may have signed up for to self-renew. For example, you may not want your gym to keep billing you after your contract is up, or you took advantage of a free trial offer somewhere, and you don’t want them to keep charging your card because you don’t trust them.

Recently a Boston-area consumer thought the only way he could ensure that the bankrupt Boston Sports Club would stop charging her monthly fees for one of their closed locations was to change her credit card number… but he was wrong. The company transferred his membership to a new location and because of this credit “feature” they were able to start charging his new card the monthly fee again.

Some scam artists have even discovered how to use these card updater services to continue to defraud victims.

Visa is not alone in telling merchants about your new card. MasterCard has a similar program called “Automatic Billing Updater” as does American Express (“CardRefresher“).

My bank allows cardholders to opt-out of the automatic renewal notification service. (See how their Visa updater program works.)

If you don’t want your card issuer to automatically notify the companies to whom you have given your card number about updates to your card, ask if you can opt-out of that service.

Does Your Cash Back Card Pay You Back Like This?

In 2019, Capital One ran a TV commercial with a woman claiming she redeemeded $115,000 in cash back rewards in just one year with her Spark business credit card.

*MOUSE PRINT:

The unreadable fine print says:

The actual amount of cash back will depend on your credit limit, payment history and purchase activity.

Well, this person must have one heck of a credit limit to have earned $115,000 with her two-percent cash back card. In fact, she would have had to have put $5,750,000 on the card that year to earn that kind of rebate.

Fast forward to 2021. Capital One is running a new commercial with another business owner claiming he redeemed $21,000 in cash back last year.

This time the fine print has changed, is more readable, and remains on the screen longer.

*MOUSE PRINT:

Rewards depicted represent higher than average rewards for customers with this card and were accumulated over multiple years. The actual amount of cash back will depend on your credit limit, payment history and purchase activity.

Nonetheless, his very words, “last year, I redeemed $21,000 in cash back… seriously, $21,000” imply that that is what he earned that year when in fact he did not.

We asked Capital One why they continue to advertise what we believe to be misleading cash back claims.

A spokesperson for Capital One replied:

“[Both] commercials speak to redemption stories rather than rewards earned in any particular period, [and] the Happy Howie’s disclosure does further clarify that the rewards themselves were earned over multiple years…”

This implies that the woman in the flowers commercial also earned her $115K over many years.

In not so many words, the spokesperson also referenced a case brought against the bank by Chase on these very issues. In the 2020 decision of the National Advertising Division (NAD) of the Better Business Bureau, the bank was told the fine print on the first commercial was unlikely to be noticed or understood. It also found that the examples shown could not be achieved by over 90% of their cardholders, and that the ad did not state the typical results an average cardholder could expect.

You can judge whether the disclosure the bank made in the second commercial above (which was created after the NAD decision) complied with the recommendations made.

When You Stop Saving With Savings Bonds

Remember when U.S. savings bonds were a popular gift? You could give someone a $50 savings bond, but only pay $25 for it. It would grow over time to eventually reach the face value. Savings bonds have fallen out of favor by most investors because of very low interest rates and their long maturity periods.

Recently, MrConsumer finally decided it was time to cash in some old savings bonds from 1966, 1969, and 1995. He had long since forgotten which savings bonds continued to earn interest and which did not. As it turns out, that was an expensive lesson to learn.

US savings

*MOUSE PRINT:

The series “E” bonds from the mid-60s stopped earning interest after 30 years. This means that while the $25 bond pictured above actually was worth just over $123, it hasn’t earned a penny of interest since the mid-90s — some 24 years ago. Duh.

And a $100 series “EE” saving bond from 1995, which still had five more years until it matures, was only worth $111.56 due to a variable interest rate of only 1.02-percent currently.

So take a tip from this experience — check the value of your savings bonds with this handy tool and quickly cash in those that mature and stop earning interest.