Setting up a pre-authorized payment from your credit card can be a convenient way to keep on top of ongoing everyday payments such as phone bills or internet streaming subscriptions. However, if you’d rather have more control over how and when your payments are made, cancelling a pre-authorized payment isn’t a complicated process. Here’s why.
Why would I need to cancel a pre-authorized payment?
Pre-authorized payments can simplify how you make payments, but there are instances when you might want to put a stop to one or more of these payments. Some of the most common reasons to stop pre-authorized payments include the following:
Change in income. There is a change in your income and you want more control over how you handle your expenses.
Cancel a subscription. You want to cancel a subscription, for example, to a magazine, charity, online streaming service or gym membership.
Moved house. You’ve moved to a new area and you want to stop pre-authorized payments to previous utility providers.
Cancel a service you no longer want. You want to cancel a pre-authorized payment you signed up for in a rush or unwittingly.
How do I cancel my pre-authorized payment?
You can usually cancel a pre-authorized payment by:
Notifying your credit card provider. You can usually log in to online banking, write a letter or call your credit card provider to cancel a pre-authorized payment. If the payments continue, contact your credit card provider to discuss reimbursement and ensuring they cancel the pre-authorized payment as requested.
How to write a letter to cancel a pre-authorized payment
When writing a letter to cancel your pre-authorized payment, you’ll need to include the following information:
Information of what the pre-authorized payment is.
Your personal details and the credit card account in question.
Keep in mind that cancelling a pre-authorized payment in the middle of a contract term can come with repercussions, so it’s best that you get legal advice in such a situation.
The letter below is only a sample and should work as a guide. Remember that you might have to make changes to suit your particular situation.
Sample letter for cancelling a pre-authorized payment on your credit card
[Your name and address][Date]
To:
[Name of credit card provider][Address]
Account name: [XXXXXXXXXX]
Credit card account No: [XXXXXXXXXXX]
Dear Manager,
RE: CANCELLATION OF PRE-AUTHORIZED PAYMENT
I request that you cancel a pre-authorized payment authority previously granted by me to [name of the merchant] with immediate effect.
Find enclosed a copy of the letter I sent to [name of the merchant] instructing it of the same.
Yours faithfully,
[Signature][Name]
When and what can I expect from the response?
Your cancellation of the pre-authorized payment should take effect almost immediately. If you’re having any issues stopping the payment, contact your credit card provider immediately to discuss the issue.
What else should I be wary of when cancelling pre-authorized debit payments?
Cancelling a pre-authorized payment linked to your credit card is not particularly difficult, but there are some conditions to remember before you go ahead:
Breach of contract. If the pre-authorized payment you wish to cancel comes linked to a product or service you’ve purchased in the past, and you’ve to keep making payments for a given time period, cancelling it can lead to a breach of contract. You’ll need to make sure you continue to make payments manually to avoid any legal consequences.
Implementation of instructions. You instructing your credit card provider to cancel a pre-authorized payment is one thing, and it implementing your request is another. As a result, make sure you go through your credit card statements carefully and check if the payment in question have stopped.
Time limitations on chargebacks. If your credit card provider doesn’t cancel a pre-authorized payment, contact it as soon as possible for a chargeback. This is because card providers have different time limits in place when it comes to processing chargebacks.
Cancelling a pre-authorized payment from your credit card is not difficult: You have to contact your credit card provider and instruct it to cancel the payment in question. Whether you do this over the phone, online or in writing, make sure you keep an eye on your account to ensure that your credit card provider did indeed cancel the pre-authorized payment.
Frequently asked questions
You would first have to pay your account’s outstanding balance in full, and then ask your credit card provider to cancel your account. You can usually cancel an account online, via phone, in person at a branch or in writing.
Unfortunately, you cannot. You would have to cancel the pre-authorized payment and then restart it again.
You should get in touch with your credit card provider as soon as possible.
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Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog. See full bio
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