It is your responsibility to cancel all recurring charges with third parties before closing the bank account you authorized for payment.
Generally, a recurring charge is based on an agreement between you, as the account holder, and the merchant. Because the bank was not a party to that agreement, the bank cannot cancel it for you. You need to instruct the merchant to stop debiting your account before you close the account.
Last Reviewed:April 2021
Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.
FAQs
Generally, a recurring charge is based on an agreement between you, as the account holder, and the merchant. Because the bank was not a party to that agreement, the bank cannot cancel it for you. You need to instruct the merchant to stop debiting your account before you close the account.
Does closing an account stop recurring payments? ›
If you close a bank account, companies and vendors will no longer be able to automatically deduct monthly payments tied to that account. You will have to make other arrangements to pay what you owe or discontinue any service agreements.
Can a closed account still be charged? ›
Can the bank continue to charge interest and fees? Yes. The bank may charge you for interest and fees that were assessed before you closed your account.
Can transactions still happen on a closed bank account? ›
The receiving bank rejects the transaction
If a bank receives a transfer or direct deposit to a closed account, it may reject the transaction outright. Depending on how quickly this happens, the money may never leave the sender's account, or it may get returned several days later.
What happens to pending transactions when an account is closed? ›
What will happen to debit card transaction in authorizations? Any Pending authorizations (in 'Authorized' status; not Declined, Canceled or Completed) will go through. New authorizations won't go through once the account is closed and will be declined automatically.
Can I ask my bank to block a recurring payment? ›
You can contact your bank and place a stop payment order on the recurring transaction. Generally, a stop payment order is only good for six months. To stop payment, you will need to notify your bank at least three business days before the next payment is scheduled to be made.
How do I stop unwanted recurring payments? ›
The best way to stop these payments is to first cancel your subscription with the company directly by requesting a cancellation via email or phone. If this doesn't work, you should contact your bank or card company online or by phone to cancel the payment.
What happens to payments made to a closed bank account? ›
Often, if a financial institution receives a request for transfer and doesn't have an account with a matching account number, or the account has been closed, the transfer will be declined. No money will be exchanged. The funds will remain with the sender.
Can a bank take money from a closed account? ›
If you have money in the account at the time it's closed, the bank is required to return it to you minus any outstanding fees.
Why are banks suddenly closing accounts? ›
They close down checking and credit-card accounts in part to keep regulators, who are worried about money laundering and other criminal activity, out of their hair. The closures often happen without warning, and chaos ensues when people lose access to their money for weeks and can't pay their bills.
Why can't a pending transaction be canceled? Because a pending transaction is temporary and can change, you are unable to alter it until it is finalized and posted to your account.
Can I tell my bank to stop a pending transaction? ›
Can I tell my bank to stop a pending transaction? You can tell your bank to stop a pending transaction if you have a legitimate reason to do so, such as if the merchant ignores or denies your request or you suspect fraudulent activity.
Can banks override pending transactions? ›
If the vendor takes too long to accept the money, the bank can cancel the transfer. If that happens, the pending transaction will vanish from your account, along with the charge against your balance. In addition, pending transactions can take longer to clear because of how businesses operate in specific industries.
Will closing a bank account cancel subscriptions? ›
If you use your account to make recurring payments (such as internet access or subscriptions) you'll need to contact the businesses to let them know the account is closed and to make other payment arrangements.
Will cancelling a card stop recurring payments? ›
And yes, cancelling a credit card will stop recurring payments. However, it will also prevent you from using your credit card altogether. If you cancel your credit card to stop a payment, you will want to make other payment arrangements with whomever you've given that pre-authorization to.
How do I stop a recurring card payment? ›
Stopping a card payment
You can tell the card issuer by phone, email or letter. Your card issuer has no right to insist that you ask the company taking the payment first. They have to stop the payments if you ask them to. If you ask to stop a payment, the card issuer should investigate each case on its own merit.
Can recurring expenses be stopped? ›
How to stop recurring payments. If you decide you no longer want to pay a recurring charge, you have a few options. You can directly contact the company providing the product or service and let them know you want to cancel or unsubscribe. You may be able to do that online, in person, by phone or by mail.
