Thrifty Thinking: Did “free trials” just become a good thing for consumers?

Mastercard recently announced a new policy for free trials, a move championing consumers and sure to create noise in the credit card space this year. "It's fair to say that most of us have fallen on the wrong side of a free trial offer before, so this new policy from Mastercard is great news for all consumers,” said Brittney Mayer credit strategist at CardRates (https://www.cardrates.com/).

Mastercard is introducing rules for merchants that offer free-trials to make this a hassle-free experience for their consumers. The rule change will require merchants to gain cardholder approval at the conclusion of the trial before they start billing.

“Requiring merchants to provide complete transparency before making charges after a free trial will make it much harder to trick consumers into paying for products they didn't actually intend to purchase," continued Mayer.

The new policy is reported to kick in April 12, 2019. While definitely a step in the right direction, however, the new policy does have a few shortcomings:

• Physical Products Only: The new policy will only apply to physical products, and not for digital subscriptions (Netflix, Spotify, etc.).
• Opt-In May Not Be Needed:  It's unclear if "gain cardholder approval" means that the user must actively opt-in for the merchant to start making charges, or if notification of charges will be enough to satisfy the policy.
• Cancelling May Still Be a Challenge: Merchants can make cancelling as easy — or as difficult — as they want, so cancelling could still require jumping through some hoops.