Recurring billing.
In plain English
Recurring billing, often called a subscription or auto-renewal, is when you authorize a company to charge you automatically on a repeating schedule, monthly or yearly, without approving each charge. It powers streaming, software, gyms, and memberships. The convenience is real, but so is the catch: charges continue, often after a free trial ends or a promotional rate expires, until you actively cancel. Many people pay for services they no longer use because the charge is easy to forget. You can usually cancel through the provider, and your bank can help stop a payment if a company will not.
01Why it matters
Recurring charges are easy to start and easy to forget, so they quietly drain money for services you may not use, which is why reviewing them pays off.
02The math, step by step
Suppose you carry four subscriptions averaging 15 dollars a month that you rarely use, about 60 dollars a month or 720 dollars a year. Invested at a 7 percent long-run return, that 720 dollars a year would grow to roughly 68,000 dollars over 30 years.
03What this is NOT
Recurring billing is NOT a per-purchase approval. You authorize it once and it repeats automatically, so it keeps charging until you cancel, not until you approve the next one.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice