Can a Merchant Charge a Cancelled Credit Card?

By Bruce Boswell •  Updated: 12/14/21 •  6 min read
Filed under: Credit Cards

When you have a credit card, it is likely that you will set up a variety of payments from this account. So, when you cancel that credit card, you might be wondering what happens to these payments. Especially if you have payments that are scheduled with a merchant. 

If you have a new debit card, then merchants can still charge to your old account, and the payment will come from your new account. That is because the bank will recognize that the two accounts are connected, and authorize the payment through. But, the same thing doesn’t happen with credit cards. 

Can a Merchant Charge a Cancelled Credit Card

So what happens when you cancel a credit card? Can merchants still charge to these accounts? In this guide, we’ll be telling you everything you need to know about this. So, to find out more, keep on reading. 

What is a Merchant?

First things first, let’s take a look at what a merchant is. When you think of a merchant, you might think of people who trade in foreign countries because this is what a traditional  merchant was. But, now, most of the time, when people speak about merchants, they are instead talking about merchant accounts. 

A merchant account is a commercial business account that can be used to process transactions. Businesses can apply for these accounts, and then use them to process online transactions.

Since their creation, they have become very important for companies who trade online, and it has become almost impossible for companies to sell their products and services online without one of these accounts. 

What is a Cancelled Credit Card?

Now, let’s take a quick look at exactly what a cancelled credit card is. Well, as you have probably guessed, a cancelled credit card is a credit card that has been cancelled. There are two situations where a credit card will become cancelled, either you will cancel it, or the bank will cancel it. 

Most of the time, when you cancel your own credit card, you do so knowingly. A lot of the time, people will cancel their credit card when they recognize that they do not need it any longer.

So, they will close the account to remove that credit. Whereas, when the bank cancels a credit card, the borrower doesn’t usually have a say in this. Most of the time, banks will only cancel unused credit cards.

So, if you do not use your card, there is a chance that your bank might close that account after a year of inactivity. 

Can a Merchant Charge a Cancelled Credit Card?

Before we answer this, it is important to note that there is a big difference between a cancelled credit card and an unused credit card. Just because you do not use a credit card doesn’t mean that it has been cancelled.

So, if you fail to cancel your credit card, transactions can still be taken from it. But what about a cancelled credit card? 

Whether, or not, a merchant will be able to charge a cancelled credit card will depend partly on who cancelled the account. If the bank has cancelled the credit card, due to inactivity or another reason, then the merchant will not be able to charge the money.

This is because the bank will block the transaction. But, if you have cancelled the card, then this might not be the case. 

If you have continuous payments set up with a merchant, then these payments could still be taken. Even if you have cancelled the account. This is because the bank could fail to block these payments, even though you no longer have the card.

So, if you have any continuous payments set up on your credit card, it is best to cancel these as well as cancelling the credit card itself. 

How Can You Stop a Merchant from Charging Your Credit Card? 

As we have said, it is possible for merchant accounts to continue to charge your credit card, even after you have cancelled the card. This is because there is always the possibility of errors on the bank’s part. So, how can you stop a merchant account from charging your credit card?

Well, the best way to stop a merchant from charging your card is to cancel that payment right at the source. Depending on the vendor which is charging the account, it could be easy, or it could be a lot more difficult.

Some companies make cancelling subscriptions and continuous payments easy, and you can simply do this by navigating to the correct area of their website. But, with some other services, this is a lot more difficult. 

If you cannot find where to cancel your subscription, then it is best to write to the vendor. You can either email them or write them a physical letter stating your wish to cancel the subscription, and therefore the payments.

You should also request written confirmation that the payments will no longer be taken, as you can use this to protect yourself if they attempt to take any further payments in the future. 

Can a Merchant Refund a Closed Credit Card?

All this talk might have you wondering if a merchant can refund payments to a closed/cancelled credit card, so let’s take a look. Most of the time, refunds can only be given to the account from which the payment was taken, which can cause problems if you have since closed that account.

But, thankfully, companies have a duty of care when it comes to refunding payments. 

If you are due a refund, and the credit card that you used has been cancelled, then that payment will bounce back to the merchant. If this happens, it is the merchant’s job to work with your bank to ensure that the refund reaches you.

So, while they cannot refund the closed card itself, merchants are able to return refunds to the correct individuals if they work with the banks. 


In short, yes, a merchant can charge a cancelled credit card. But, most of the time these payments will not be taken, especially if the card was cancelled by the bank.

However, there is always a chance that the payment could be taken, so it is best to cancel all continuous payments on your credit card before you cancel the card itself.

Bruce BoswellBruce Boswell

Bruce Boswell

Bruce Boswell enjoys researching and writing about all things related to investing and saving money. Whenever he has a chance, Bruce loves travelling all around the world with his wife and trying new foods.