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A Look At Direct Debit

Direct debits are, without a doubt, a positive thing, as I should emphasise at the outset. So, what exactly is the purpose of this article? It’s just to point out that setting up a direct debit isn’t always the ideal option when paying off something. Alternative approaches can sometimes help you save money. We took a look at direct debit, and what it involves.

A Look At Direct Debit – There Are Some Disadvantages

In many cases, paying off an insurance policy on a monthly basis results in you paying more in interest costs. It’s preferable to pay off a year’s worth of charges all at once if you can. The same may be true about automobile taxes. If you pay in monthly or 6-monthly instalments, there is a 5% extra. However, you may set up a 12-month Direct Debit payment to ensure you don’t forget. You can look up the charges at any time on the government’s website.

An Example Of Its Use – Your Phone Contract

We pay for our phones on a monthly basis for the most part. Over the course of a pre-agreed contract length, we are essentially paying for two separate items. Every month, you pay for airtime as well as the phone’s cost. It is, however, far cheaper to buy the handset directly if you can afford it. After that, get an inexpensive sim-only plan. This saves you a lot of money over the course of the contract. Furthermore, you are considerably less likely to get locked into a long contract with a SIM-only deal.

Catalogue Payments

Recently, I watched Martin Lewis say that catalogue companies that allow customers to buy now and pay later could become the new financial scourge for millions of people. This is due to the fact that such direct debits, which allow you to pay off products over time, have astronomical interest rates. As a result, the final total is significantly higher than the advertised price. Our advise is the same as it has always been. If you have to buy something, attempt to pay for it as soon as possible. Borrow solely for necessities and not for fun.

Subscription Services

Amazon Prime is an example of a subscription service where paying in advance for a year or more of service is less expensive than paying monthly. Many businesses now use inducements to keep workers on board for extended periods of time. In a similar way, I save money by paying for audio editing services in this manner. So, if you can afford it, pay for such subscriptions in advance for a year. Many transportation costs, such as season tickets for trains, trams, and buses, follow the same logic. The more you buy for a longer length of time, the less it costs per day.

Spreading Costs

It’s a fantastic approach to stretch expenditures without incurring extra fees or interest charges if you can get a 0% purchase credit card. You must pay the bare minimum each month. before the deal expires, and pay off the outstanding balance. Another option is to borrow from a family member or a friend. This, however, comes with its own set of concerns.

A Look At Direct Debit – Clear Advantages

Of course, on the whole, Direct Debits are good and can save you funds. Many suppliers offer a discount too if you pay by direct debit. My football season ticket is paid by direct debit, at no extra cost. This allows me to spread the cost, when in the past i had to find the full amount every May. Utility bills should be paid by direct debit. And a key advantage with them is that things get paid automatically, without you having to remember to make payments. In the past i have missed payments and my credit score has suffered. And all because i did not get round to setting up a direct debit.


Remember that with a Direct Debit, the amount can vary from month to month. A standing order, on the other hand, is for a specific sum. Before committing to a Direct Debit, be sure you have sufficient funds in your account. You will avoid penalties for becoming overdrawn if you do so.

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