10 ways you can make Direct Debit savings
If you are planning to review your finances and how you pay out money, here’s 10 tips of how you can make direct debit savings.
- Pay your gas and electric bills via Direct Debit. The savings can be huge! Nearly all the major energy companies will offer a discount for anyone who pays their bill by Direct Debit. We would recommend using a comparison site to find the best provider, but remember, some have a vested interest in showing you certain deals. (They can make £60 for each person who uses the information to make the switch).
- Look for other incentives. Some councils will enter you into a prize draw; some magazines will give you free issues and some membership schemes offer you a discount or a couple of months free if you pay by Direct Debit. There are loads of deals out there so shop around.
- Spread the payments for free. Many organisations will offer to let you spread the cost of paying for something when you agree to pay by Direct Debit. It’s effectively like getting an interest free loan. Although your council tax bill is due on the 1st of April, most people will choose to pay it back over 10 or 12 months. Other organisations are now offering similar arrangements. Our customers, Leeds Rhinos and Harlequins Rugby Club do this. They will let you pay for a membership over several months rather than an annual season ticket payment up front.
- Claim back on any direct debit errors. If you ever do find that a Direct Debit amount is incorrect you are entitled to a full and immediate refund under the Direct Debit Guarantee. If you end up paying for goods or services through a card payment or cash it is much harder to recover after the event. Using Direct Debit, guarantees that you won’t be left out of pocket if an error occurs that is not your fault.
- Set up a Direct Debit for a savings plan. By moving small amounts of money each month into a savings account from your current account you can build up a healthy amount without really noticing it. Many of us would have saved pennies in a jar when cash was king but now that we tend to pay for most things electronically, this is a great way to save and you hardly notice you are doing it.
- Use DD to pay off Debts before saving. In a similar way to the above you can make small payments on a regular basis to bring down those outstanding credit card bills or pay back debts easily. You may be able to transfer the balance to a 0% deal and then set a regular DD to pay it back. Savings rarely pay you better interest than the amount you are charged for debts so where the interest is not 0% it makes sense to pay these back first.
- Look for cashback deals and other bank incentives where DDs are used. Many banks are now offering an incentive via cashback or better interest rates when you have at least 2 direct debits set up on the account. Most people have at least 5 or more direct debits so just setting up 2 should be easy for most people.
- Cancel unwanted DDs. Whilst we are big fans of Direct Debit as a payment method as it is so safe and easy to use it does make sense to check your account occasionally for anything that you are no longer using. Direct Debit can save you a lot of money but if you are no longer using that gym membership that you took out in January then you can make an immediate saving.
- Use DD where you don’t want to forget to pay. We can sometimes end up paying penalties or additional sums if we don’t pay for things on time. Services like the Dartford Crossing and the Congestion charge offer Direct Debit to make sure that you don’t incur a fine or charge for late payment. If you set up an account in advance it is often cheaper anyway. This is particularly important for any credit agreements where you could pay extra interest if you don’t pay it back on time. Credit card companies can charge £12 for late payments and it can affect your credit rating so Direct Debit can help you save money in a variety of ways where credit agreements are in place.
- Switch bank accounts. Although this isn’t strictly a way of saving money, it does make sense to switch your bank account to make sure that you get the best deal and to take advantage of the switching incentives offered by some banks. If you use the account switching guarantee then you at least know that all your Direct Debits will move across and you don’t miss out on all the other benefits we mentioned above.
If you have any questions about these tips, please contact us on 0845 658 6488 or e mail: email@example.com.