Subscription

A subscription is a decision made once that spends money every month. At signup you store a card and agree to a price and an interval, and from then on the merchant charges the card each cycle without asking again; the service and the charge stop only when you cancel. The default of a subscription is to keep paying, which separates it from every other way of buying something and is why a list of small subscriptions is usually larger than its owner would guess.

In a sentence

• "The video subscription is $17.99 a month, which is $216 a year for a service we watch in three of them."
• "A subscription charges again next month on its own. A purchase is over the day you pay for it."
• "Her fitness app subscription renewed at $79.99 for the year, and the charge looked like a one-off on the statement."

How it works

1. You sign up and store a payment method, a card or a bank account, sometimes through an app store that bills on the merchant's behalf.
2. The first charge sets the cycle. A monthly plan charges on the same day each month from the signup date; an annual plan on the anniversary. A free trial or an introductory rate delays or reduces the first charges, and the full price starts on a date fixed at signup.
3. Each cycle is charged in advance, whether or not the service was used.
4. The price can change. The merchant sends a notice, or does not, and the next charge is at the new price.
5. Cancelling stops the next charge. Access usually runs to the end of the period paid for, and unused time on an annual plan is rarely refunded, so the day to cancel is before the renewal.

Monthly cost of an annual plan = annual price ÷ 12

An example

Six lines come to $87.63 a month and $1,051.51 a year. The two annual plans are $115.87 of the year and never appear on the same statement twice, so a scan of last month's card would have found four subscriptions and missed the other two. The video plan alone, kept for three years at this price, is $647.64, and nobody decided to spend $647.64; they decided to spend $17.99 once.

Why it matters

A subscription is judged at signup and then never again unless you make a point of it, and the price you agreed to is not the price you pay for long. The decision the term changes is the one you make on the day a charge lands: whether you would sign up again today, at this price, for what you actually use. The mistake it prevents is reading the list by its monthly prices; the list costs its yearly total, annual renewals included.

Subscription versus a one-time purchase and a membership

A one-time purchase ends when you pay; a subscription is an open agreement that charges again at the next interval until it is cancelled. The test is time: the same merchant at the same or a similar amount at a regular interval is a subscription, and a charge with no earlier match is a purchase until it repeats. A membership is a subscription under a warmer name. The gym and the warehouse club charge on a schedule from a stored card and stop only when cancelled, which is the whole of the definition. See How to tell a subscription from a one-time charge on your statement.

Common questions

Is a subscription the same as a recurring charge? Every subscription is a recurring charge, but the reverse is not true. Rent, the car payment and the electric bill all recur, and none is a subscription: rent cannot be cancelled with a click, the utility bills for what was used, and the loan payment ends when the balance does. See Recurring charge.

How do I know whether a charge is a subscription? Search the merchant across twelve months of statements on every account. The same amount at a regular interval is a subscription, and one charge exactly a year ago at the same amount is an annual one. A round price ending in .99 and a merchant name carrying the word plan, renewal or membership give it away sooner.

Is annual billing cheaper than monthly? Only if you keep the service past the break-even month, the annual price divided by the monthly price, rounded up. A $12.99 plan that costs $119.99 a year breaks even in month ten, so a full year saves 23% and eight months costs more than monthly billing would have. See Annual versus monthly billing, and when the discount is worth it.

What happens when I cancel? Future charges stop, and access usually continues to the end of the period already paid for; unused time on an annual plan is rarely refunded beyond a short window after the charge. Cancel through the channel you subscribed in, and confirm on the next cycle that no charge arrived.

Go deeper

• How to find every subscription you're paying for runs the twelve-month scan of every account and puts each line on a monthly footing.
• How to tell a subscription from a one-time charge on your statement is the merchant search that decides whether a charge will repeat.
• What to do when a subscription price goes up quietly compares each charge with the last one and decides at the new price.
• Annual versus monthly billing, and when the discount is worth it finds the break-even month before you commit to a year.

Where it shows up in Zypper

Zypper finds your subscriptions from your transactions rather than from your memory. As transactions sync, it identifies recurring groups, subscriptions, bills and utilities, recurring income and card payments, automatically from the pattern of your actual charges, and each group on the recurring page shows its frequency, its next expected payment and amount, its status, active, inactive or overdue, and its history. The Recurring payments identified notification tells you when a new group surfaces, and a subscription you cancel goes quiet once it stops charging, which confirms the cancellation stuck. See Recurring transactions and bill tracking for the details, or get started with Zypper to see your own list.