How can a company charge a closed credit card?
If this is a pre-authorized automatic billing, and if you have signed any contract with the  merchant, cancelling may not block any future charges from the merchant.  Happens with gyms, magazines, memberships quite often. There is a time period after the cancellation this will occur, then it'll be completely dead. You should contact the Company who purchased your visa balance and ask/write the following questions:  1. Dispute the charge from Emusic.com as invalid. 2. Instruct that no future charges will be accepted.  3. How come Emusic.com was allowed to debit your account? 4.  When did they purchased your visa account? 5.  Ask for written verification that they purchased your account from the original company? such as a bill of sale? 6.  Ask if the company is a registered debt collector in your state? 7. The FAIR DEBT COLLECTION PRACTICES ACT (FDCPA) may apply to your circumstance(s) and provide for $1,000 in damages to the consumer and $1,000 attorney fees from a third party debt collector per violation. You may want to seek the advice of an attorney  to help determine if you have a good cause to sue the company and Emusic. If you did not receive anything form Emusic.com or your contract/agreement ended without a cancelation/early termination fee,  ALso, file a written dispute with Emusic.com.  Check your credit report.   Many companies automatically charge your accounts through automatic payments after termination of the agreement because they get away with it in the U.S., if the consumer does not take steps to dispute the current charge and stop future charges from occurring in the future. Never use auto pay unless required and the service is essential.  When using auto pay use a dedicated account not your main checking account. It is less of a pain in the neck to close the account if its your 2nd or 3rd checking account and not your only account. Wow, I had never heard of this before but I looked into it a bit and Mikey was spot on. It seems that if you don't pay attention to the fine print when making credit card purchases (as most of us tend to skip) many companies have stipulations that allow continued charges if they are recurring fees (monthly, yearly, etc.) even after you have cancelled the card.
"Well, I answered a very similar question ""Credit card payment date"" where I showed that for a normal cycle, the average charge isn't due for 40 days. The range is 35-55, so if you want to feel good about the float just charge everything the day after the cycle closes, and nothing else the rest of the month. Why is this so interesting? It's no trick, and no secret.  By the way, this isn't likely to be of any use when you're buying gas, groceries, or normal purchases. But, I suppose if you have a large purchase, say a big TV, $3000, this will buy you extra time to pay. It would be remiss of me to not clearly state that anyone who needs to take advantage of this ""trick"" is the same person who probably shouldn't use credit cards at all. Those who use cards are best served by charging what they can afford to pay at that moment and not base today's charges on what paychecks will come in by the due date of the credit card bill." "This is somewhat unbelievable.  I mean if you had a business of collecting debts, wouldn't you want to collect said debts?  Rather than attempting to browbeat people with these delinquent debts into paying, you have someone volunteering to pay.  Would you want to service that client?  This would not happen in just about any other industry, but such is the lunacy of debt collecting. The big question is why do you need this cleared off your credit?  If it is just for a credit score, it probably is not as important as your more recent entries.  I would just wait it out, until 7 years has passed, and you can then write the reporting agencies to remove it from your credit. If you are attempting to buy a home or similarly large purpose and the mortgage company is insisting that you deal with this, then I would do the following: Write the company to address the issue.  This has to be certified/return receipt requested.  If they respond, pay it and insist that it be marked as paid in full on your credit.  I would do this with a money order or cashiers check.  Done. Dispute the charge with the credit reporting agencies, providing the documentation of no response.  This should remove the item from your credit. Provide this documentation to the mortgage broker.  This should remove any hangup they might have. Optional:  Sue the company in small claims court.  This will take a bit of time and money, but it should yield a profit.  There was a post on here a few days ago about how to do this.  Make part of any settlement to have your name cleared of the debt. It is counterproductive to fall into the trap of the pursuit of a perfect credit score.  A person with a 750 often receives the same rate options as a person with 850.  Also your relationship with a particular lender could trump your credit score. Currently I am ""enjoying"" the highest credit score of my life, over 820.  Do you know how I did it?  I got out of debt (including paying off the mortgage) and I have no intentions of ever going into debt for anything.  So why does it matter?  It is a bit ridiculous." "In 2010, the Restore Online Shoppers' Confidence Act was passed, which prohibited certain activities, most of which had to do with online sites sharing your CC info with third parties.  However, the final part of the act deals with ""negative option"" marketing, which is basically what you're describing - ""We will charge you unless you say no"". It requires three components to allow a negative option: If you did not explicitly enroll in automatic payment, and made the initial purchase online (or made your most recent purchase online, I suspect) then it sounds like this was a violation of this act.  On the other hand, the act isn't terribly careful about defining terms, and is really quite vague in a lot of places, so it's possible they would argue they are not using a 'negative option' scheme but instead simply charging your bill similar to how your phone company might use autopay. If it was not online, then this probably doesn't apply.  Instead, the FTC's rule on Negative Option with regard to sale of goods applies.  Title 16 Part 425 covers this; this law is much less limiting as to what the marketer can do." I did just what you suggest. The card company honored the charge, they told me the temporary number was solely for the purpose of assigning a number to one vendor/business. So even though I set a low limit, the number was still active and the card company paid the request. Small price to pay, but it didn't go as I wished.    For this purpose, I've used Visa/Mastercard gift cards. They are often on sale for face value and no additional fees. "The fee structures are different for PIN-based transactions versus ""credit"" style transactions. Usually there is a fixed fee (around $0.50) for PIN-based transactions and a varying fixed fee plus a percentage for credit transactions (something like $0.35 + 2.5%). There are also value limits for PIN-based transactions... I believe that you cannot exceed $400 in most places. The signature feature of credit transactions isn't there to protect you, it signifies your agreement to comply with the contract you and the credit card issuer, protecting the merchant from some types of chargeback. Some merchants waive the signature for low dollar value transactions to increase convenience and speed up the lines. All of your other questions are answered elsewhere on this site." "Ever wonder why certain businesses won't accept certain credit cards? (The sign above the register saying ""Sorry, we don't accept AmericanExpress""). It's because they don't want to pay that credit card company's transaction fees. One of the roles of the credit card company is to facilitate the transaction process between the customer (you) and the store. And now that using credit cards over cash or check is so ingrained in our culture, it creates extra work for the customer to make purchases at an establishment that is cash-only. Credit card companies know this, and so do businesses. So businesses will partner with credit card companies so that customers can use their cards. This way, everything is handled electronically (this can also benefit the business, since there's added security as they're not dealing with cash directly, and they don't have to manually count as much cash later). However a business may only budget a certain amount of their profits they want taken by credit card transactions. So if a company's fees are too high (say AmericanExpress, for example) and they are banking on you already having a Visa card, the company isn't going to go out of its way to provide the AmericanExpress option for you. If it were free for the business to use a credit card company's service at their stores, then they would all just provide the option for every card! So the credit card company making money is all contingent on you spending your money by using their credit card. You use the card, and the store pays the company for the transaction." It is not only merchants that charge for credit card purchases but also service providers. Have you looked at your phone bill lately and even your Council Rates. Most of them charge a small %, usually about 1% on Matercard and Visa, and closer to 2% on Diners, Amex and American Express cards. However, the merchants and service providers that do charge a fee for credit card use, must also provide alternative ways of paying to their customers, so that the customer has the choice to either pay or avoid paying this fee. "No. Credit card companies will typically not care about your individual credit card account. Instead they look either at a ""package"" of card accounts opened at roughly the same time, or of ""slices"" of cardholder accounts by credit rating. If an entire package's or slice's balance drops significantly, they'll take a look, and will adjust rates accordingly (often they may actually decrease rates as an incentive to increase you use of the card). Because credit card debt is unstructured debt, the bank cannot impose an ""early payment penalty"" of any kind (there's no schedule for paying it off, so there's no way to prove that they're missing out on $X in interest because you paid early). Generally, banks don't like CC debt anyway; it's very risky debt, and they often end up writing large balances off for pennies on the dollar. So, when you pay down your balance by a significant amount, the banks breathe a sigh of relief. The real money, the stable money, is in the usage fees; every time you swipe your card, the business who accepted it owes the credit card company 3% of your purchase, and sometimes more." "There is no universal answer here.  Some card issuers will.  Some that will close the account will warn you first.  For my ""sock drawer"" cards I'll try to take each out semi-annually to make a single transaction, then put it back in the drawer. I've heard you should charge something quarterly, I've never had one closed with semi-annual charges." Obviously, the credit card's administators know who this charge was submitted by. Contact them, tell them that you don't recognize the charge, and ask them to tell you who it was from. If they can't or won't, tell them you suspect fraud and want it charged back, then wait to see who contacts you to complain that the payment was cancelled. Note that you should charge back  any charge you firmly believe is an error, if attempts to resolve it with the company aren't working. Also note that if you really ghink this is fraud, you should contact your bank and ask them to issue a new card number. Standard procedures exist. Use them when appropriate. "Tough spot. I'm guessing the credit cards are a personal line of credit in their name and not the company's (the fact that the business can be liquidated separately from your parents means they did at least set up an LLC or similar business entity). Using personal debt to save a company that could have just been dissolved at little cost to their personal credit and finances was, indeed, a very bad move. The best possible end to this scenario for you and your parents would be if your parents could get the debt transferred to the LLC before dissolving it. At this point, with the company in such a long-standing negative situation, I would doubt that any creditor would give the business a loan (which was probably why your parents threw their own good money after bad with personal CCs). They might, in the right circumstances, be able to convince a judge to effectively transfer the debt to the corporate entity before liquidating it. That puts the debt where it should have been in the first place, and the CC companies will have to get in line. That means, in turn, that the card issuers will fight any such motion or decision tooth and nail, as long as there's any other option that gives them more hope of recovering their money. Your parents' only prayer for this to happen is if the CCs were used for the sole purpose of business expenses. If they were living off the CCs as well as using them to pay business debts, a judge, best-case, would only relieve the debts directly related to keeping the business afloat, and they'd be on the hook for what they had been living on. Bankruptcy is definitely an option. They will ""re-affirm"" their commitment to paying the mortgage and any other debts they can, and under a Chapter 13 the judge will then remand negotiations over what total portion of each card's balance is paid, over what time, and at what rate, to a mediator. Chapter 13 bankruptcy is the less damaging form to your parent's credit; they are at least attempting to make good on the debt.  A Chapter 7 would wipe it away completely, but your parents would have to prove that they cannot pay the debt, by any means, and have no hope of ever paying the debt by any means. If they have any retirement savings, anything in their name for grandchildren's college funds, etc, the judge and CC issuers will point to it like a bird dog. Apart from that, their house is safe due to Florida's ""homestead"" laws, but furniture, appliances, clothing, jewelry, cars and other vehicles, pretty much anything of value that your parents cannot defend as being necessary for life, health, or the performance of whatever jobs they end up taking to dig themselves out of this, are all subject to seizure and auction. They may end up just selling the house anyway because it's too big for what they have left (or will ever have again). I do not, under any circumstance, recommend you putting your own finances at risk in this. You may gift money to help, or provide them a place to live while they get back on their feet, but do not ""give till it hurts"" for this. It sounds heartless, but if you remove your safety net to save your parents, then what happens if you need it? Your parents aren't going to be able to bail you out, and as a contractor, if you're effectively ""doing business as"" Reverend Gonzo Contracting, you don't have the debt shield your parents had. It looks like housing's faltering again due to the news that the Fed's going to start backing off; you could need that money to weather a ""double-dip"" in the housing sector over the next few months, and you may need it soon." "Typically, the CC company itself won't follow the customer very far upon a default (though it certainly can act as its own debt collector, or hire an agency for a fee to do the collection).  What most often happens: Once they do that, assuming they win the lawsuit, they can do the following: They cannot ""force"" you into bankruptcy, but they might make it so you have no better options (if bankruptcy is less painful than the above, which it often is).  They certainly can (and will) report to the credit bureaus, of course.  For more information, Nolo has a decent help site on this subject. Different jurisdictions have slightly different rules, so look up yours.  Here is an example (this is from Massachusetts). Not every debt is sued for, of course; particularly, pay attention to the statute of limitations in your state.  (In mine, it's seven years, for example.)  And it's probably worth contacting someone locally (a legitimate non-profit debt relief agency, or your state's help agency if they have one) to find local rules and regulations." "Yes, merchants are charged. Visa/Mastercards charge 1 to 2%, of which some part goes to the Visa/MC and the rest to the issuing bank (if you have an HDFC Bank Visa card, HDFC bank is the issuing bank. And yes, you can get a discount from the merchant - while it probably isn't allowed by Visa/MC, some merchants still provide discounts for cash. But you won't get it at places like supermarkets or large brand retail. Late fees + charges can be huge. In multiple ways - first, they all seem to charge a late fee of Rs. 300-500 nowadays, plus service tax of 10%. Then, you will pay interest from the bill date to the eventual payment date. And further, any new purchases you make will attract interest from the day they are made (no ""interest-free"" period). Interest rates in India on CCs are over 3% a month, so you really must get rid of any open balances. I've written a longish piece on this at http://in.finance.yahoo.com/news/The-good-bad-ugly-credit-yahoofinancein-2903990423.html" "I think your confusion comes from the negative impact when a creditor writes off your bad credit and ceases attempting to collect it. ""Chargebacks"" as you call them are an attempt to undo fraudulent charges on your card, whether from stolen credit card info or from a merchant who is using shady business practices. For what it's worth, if you joined on December 20, January 20 seems like a reasonable date for the next billing cycle, with the December 31 date reflecting the fact that their system couldn't automatically bill you the day you joined. I also think it's reasonable for you to ask them to refund the bill for the second month if you do not plan to use their gym further. So the dispute seems like a reasonable one on both sides. Good luck." Your credit card company will send you funds, probably a paper check, if you have a negative balance.  So this situation will not last long.  I'd guess 3-6 months at most, depending on the company's procedures.