Will canceling card prevent charges from going through?

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question Dear To Her Credit,
I recently had to book airline tickets for both my boss and me for our annual conference. I booked the tickets in early July, using the card belonging to my boss. As of August 6, the airline had not charged the card for the expense. We were given a confirmation number, and on flights in the past we normally get charged within 24 hours.

Anyhow, with the conference coming up, my boss thought it best to find a different mode of transportation. When I called the airline to cancel the flight, they informed me there would be a $200 fee per ticket to cancel. I informed my boss of this since it was on her credit card, and she decided to simply cancel her credit card, thinking that they can't charge her the $200 if her card is canceled.

I have a bad feeling about her doing that. I feel like it may not be the best way to go about it. What would be proper protocol here? Thanks! – Jodi


Dear Jodi,
Canceling a card to avoid paying a bill is not a good strategy because it doesn’t cancel the actual debt and charges made to the card. It may feel like a person has kept money out of the grasp of a merchant, but it won’t stop them from trying to collect. Merchants can use all methods of collection, including bills by mail, phone calls and collection agencies. They can even take your boss to court.

The other problem in this case is that the airline probably already has the money. Airlines typically charge for seats when the reservations are made. Even though your boss says the tickets haven’t shown up on her card, I suspect that if she looked at her online credit card account again, she would find the charges from very close to the time you booked the flights. When a flight is canceled, the airline may collect cancellation fees by refunding less than 100 percent of the amount a person paid at the time the ticket was sold.

So even if the card was canceled, that doesn’t mean the card issuer won’t be billing her for the flights.

The other possibility is that the flights were never actually booked. You often can hold an airline seat temporarily while you finalize travel plans. For example, American Airlines allows you to reserve a seat and for up to 24 hours for free in “select markets,” provided you book seven or more days before departure. During that time, your credit card is not charged. You may receive some notification that you had seats on hold.

However, if you didn’t confirm, the cost of the flight would never be charged to your credit card, and the hold would automatically expire. The good news would be that no airline bookings mean there is nothing to cancel, and there is no cancellation fees.

The only other scenario I can think of is that the airline tickets were charged to a different credit card – yours or hers. That would be an easy mistake to make. She could have handed you the wrong card, or you could have mixed it up with your own. Check all your statements and ask her to double-check hers, as well.

If the flights had actually been charged to this card or some other card, it’s too late for canceling her credit card to do any good. On the other hand, if the flights were never finalized, there is no charge and no problem. Either way, canceling the card won’t help.

You are correct that it’s not the right protocol, or even likely to be effective to cancel her credit card to try to avoid an airline cancellation fee. However, it may be difficult to tell your boss that she’s making a mistake. If you can give her advice, and if she is a smart enough manager to be willing to learn from her employees, you may help her avoid making mistakes like this in the future.

See related: Canceling a card doesn't wipe out charges for recurring services, Trip canceled? Your credit card may reimburse you

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Updated: 11-19-2018