For two consecutive quarters, subscription cancellations have outnumbered new subscriptions, according to the personal finance app Rocket Money. Streaming services have been particularly affected. The cancellation of services like Netflix, Hulu, HBO Max, and similar ones increased by 49% in 2022 compared to the previous year, according to the company Antenna.
“People are taking stock of their subscriptions as budgets are getting much tighter,” said Courtney Alev, consumer financial advocate at Credit Karma, to The Wall Street Journal (WSJ).
The decision to cancel subscriptions has been growing for some time, although inflation dropped last month to its lowest level in nearly two years. But budgets remain pressured by higher prices.
About one-third of respondents in a Credit Karma survey in December said that their biggest financial mistake last year was paying for services they never used. Another study conducted by market research firm C+R Research found that Americans were paying about $133 more than the $86 they thought they were paying for subscriptions each month in 2022.
How to Deal with Subscription Overload
A new proposal from the Federal Trade Commission (FTC) could simplify subscription cancellations. The agency wants to require merchants to make cancellation as easy for customers as signing up.
In the meantime, users are utilizing apps that assist them in managing subscriptions.
Last year, about 70,000 people downloaded ScribeUp, an app that helps users track their subscriptions by identifying what is being paid periodically and helping to cancel what is not used. Additionally, the new service also provides a credit card number for use only for recurring payments.
Another similar service that is becoming very popular is Rocket Money, a tool that is linked to the user’s financial accounts, and thus is able to identify companies that make periodic charges for services like entertainment, food delivery, among others.
Source: The Wall Street Journal