Canceling Your Credit Card May Not Stop Netflix's Recurring Charges

Millions of Americans pay for Netflix, doling out anywhere from $6.99 to $22.99 a month. It's a common belief that you can get out of recurring charges like this by canceling your credit card. Netflix won't be able to find you, and your account will just go away, right? You wouldn't be crazy for believing it, but it's a myth that canceling a credit card will definitely stop your recurring charges. From a report: Nearly 46% of Americans opened a new credit card last year, according to Forbes, which means millions of Americans also canceled old ones. When you switch cards, Netflix doesn't just stop your service -- they just start charging your new card. Granted, it might be easier to just cancel your Netflix subscription directly. There's a largely hidden service that enables Netflix and most other subscription services to keep throwing charges at you indefinitely.

'Banks may automatically update credit or debit card numbers when a new card is issued. This update allows your card to continue to be charged, even if it's expired,' Netflix says in its help center. Most major card providers offer a feature that enables this, including Visa. In 2003, Visa U.S.A. started offering a new software product to merchants called Visa Account Updater (VAU), according to a 2003 American Banker article. The service works with a network of banks to create a virtual tracking service of Americans' financial profiles. Whenever someone renews, or switches a credit card within their bank, the institution automatically update the VAU. This system lets Netflix and countless other corporations charge whatever card you have on file.

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