Canceling Subscriptions Could Get Easier

By: James Flippin · April 12, 2023 · Reading Time: 3 minutes

Recurring Expenses

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.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

TLS 1.2 Encrypted
Equal Housing Lender