How does a credit card updater service work?

A new card doesn't mean canceled autopay

Your Business Credit columnist Elaine Pofeldt
Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of 200kfreelancer.com, a website for independent professionals. She writes "Your Business Credit," a weekly column about small business and credit, for CreditCards.com.

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Question Dear Your Business Credit,
A business where I have bought things in the past uses a credit card updater service. They received the new expiration date for my credit card from that service. Can they charge me a late fee, using that information?  – Robert

Answer Dear Robert,
It is no fun getting charged a late fee. Unfortunately, if you were actually late in making a payment and your agreement with the company allowed for late fees, it is very likely the business can charge one.

For the benefit of readers who are not familiar with credit card updater services, American Express, Mastercard, Visa and Discover all offer services that help merchants keep their customers’ credit card information current. These services provide merchants with updated information for customers whose accounts have new credit card numbers or updated expiration dates.

A merchant’s convenience can be a customer’s hassle

From a merchant’s point of view, these card updater services can be convenient, eliminating the need to call customers to get a new card number if it has changed or to get a new expiration date. Without these services, keeping customers’ credit card information current would be very time-consuming.

However, consumers don’t always like card updater services. Customers sometimes believe that because a merchant no longer has their current credit card information on file the merchant can no longer charge your account.

For instance, if a customer signed up for a gym membership that bills monthly and the gym no longer has the customer’s current credit card information on file, the customer might think this will prevent future charges.

That is not the case. If you have signed a contract to pay certain charges or fees, and the merchant is able to update the credit card information with the help of a card issuer’s updater service, those charges will likely continue. Often your only remedy to end the charges is to take the required steps to end the contract.

How to deal with unauthorized late fees

If you are charged a late fee that you do not think is fair or is not in keeping with what you agreed to, then I’d suggest contacting the merchant. Ask if the merchant will waive the fee.

If the merchant is unbending and you think the merchant is not abiding by what you both agreed to, then contact your card issuer to ask for an investigation. If the card issuer finds you were wrongly charged a late fee, you may be able to avoid paying it.

However, if you want charges from a particular merchant to stop, it’s up to you to look back at any contracts or agreements you signed and do what is required to end the agreement.

If you don’t have access to those documents anymore, contact the merchant to find out how to end your purchasing agreement – and let the credit card issuer know if any shady merchant is deliberately making it difficult to end the charges.

This legwork can be a hassle, but by taking action immediately, you’ll prevent the same issue from cropping up next month and the following months.

See related: How to undo unauthorized card charges, Card updater services keep customers’ autopayments flowing

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Updated: 12-15-2017