Roughly 33% of people feel that paying for services they never use is their biggest financial mistake, according to a recent survey by Credit Karma. In today’s world, this often means paying recurring monthly subscriptions.
Subscriptions have become the dominant business model across many industries, from gyms to streaming services. Even social media companies that historically offered free products have turned to subscriptions for revenue.
The average American estimates they spend $86 per month on subscription products. But, in reality, the average amount is closer to $133. That’s a near $1,600 annual hit to your budget, stemming from expenses you might not need.
Cancellations Are Up
Americans have been on a cancellation binge for the past two quarters, with cancellations outpacing new subscriptions across a range of products.
In particular, streaming services have been hit hard. Last year, there was a 49% year-over-year spike in the number of people cutting ties with platforms like Netflix (NFLX), Disney+ (DIS), and HBO Max (WBD).
Subscription products are known for being hard to keep track of and even harder to cancel. But, luckily, that’s all starting to change.
Good News Ahead
The Federal Trade Commission proposed a new law that would require businesses to make it just as easy to cancel a service as it is to sign up. So, if a company offers 1-click sign-ups, they must also offer 1-click cancellations.
While the proposal is pending to become law, there are plenty of companies already striving to make canceling subscriptions easier, such as Rocket Money (RKT) and ScribeUp. These apps help you identify and end unwanted subscriptions.
With these services, as well as potential rule changes on the horizon, Americans may finally unsubscribe with ease — and with confidence that those charges won’t show up on their next credit card statement.
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