Paying via DD

whoimi

Hiya all

Ive spoke to a lot of people they say to me "Never pay your bills by DD or avoid paying by DD" i.e utilities Council tax etc

Does anyone know why? or do you guys agree with this?

Cardew

No I certainly don't agree.

For a start you usually(not all companies) get a reasonable discount for paying by DD for gas and electricty. This discount is normally far better than you would get from getting interest by paying quarterly.

For me the sheer convenience of not worrying about having to pay bills is reason enough to pay by DD.

The only caveat is that you must keep a track - certainly initially - of your accounts to check your DD is set at the correct level.

MarkyMarkD

The majority of customers will benefit hugely by paying by DD, whether we are talking about utilities or any other form of supply.

Those who say "don't use DD" are those who have had incorrect amounts taken, or who aren't capable of keeping enough money in their current accounts to meet their DD payments when they fall due, and hence incur charges.

I have paid all my bills by DD for donkey's years and never had any problems.

KimYeovil

You speak to funny people. Try a different circle of acquaintances.

espresso

Looks like your friends are the paranoid minority then, who would rather pay more than use the DD system, often cursed by those who have never actually used it!

linni

I like to pay my bills when they are due, I do this direct from my bank, so I dont see why I should have to pay by DD, and then claim back the overpayments, I'd rather have the money earning interest in my account. I think its personal preference, there are arguments on both sides (and yes I have had money taken out of my account without permission). Some things like monthly broadband I have no choice, but I wouldn't like all my bills to be paid that way.

espresso

linni wrote: »

I like to pay my bills when they are due, I do this direct from my bank, so I dont see why I should have to pay by DD, and then claim back the overpayments, I'd rather have the money earning interest in my account. I think its personal preference, there are arguments on both sides (and yes I have had money taken out of my account without permission). Some things like monthly broadband I have no choice, but I wouldn't like all my bills to be paid that way.

So you believe that the interest that you receive, is greater than the discount that you could get by say paying for your energy by DD? There are no overpayments to claim back if you calculate the payments correctly.

linni

No, it's just my personal preference..

brysiewysie

........... and to give you some idea, Eon currently give an 8% discount for a dual fuel account paid by direct debit. That's equivalent to a gross interest rate of around 10% if you were a non-tax payer with a savings account.

c0113tt3

Heh, the truth of direct debit is very mixed. You can have good and bad experiences.

The good, slightly cheaper rates.

The bad everything about DD to gas/elec firms is BAD (in my opinion)

You can overpay / underpay, unexpected / unplanned rises in your direct debit amounts, can be faced with unexpected one off bills due to underpaying etc.. Overpaying, what bill do you know of apart from gas/elec that you overpay? It is simply not right that utility firms can over charge and then just take it from your bank account with your permission !! You are then faced with trying to reduce direct debit amounts to stop future overpaying, and then claim back the amounts, which can be hassle.

There are 2 ideal circumstances where DD is the better, where you have already been with an energy company for at least a year, and perhaps even 2. They then have your annual useage, and underpay / overpay problems should be minimised. Or, give persistant readings on a monthly basis to the energy firm and re-negotiate direct debit amounts.

Firms operate either fixed or variable DD and some do both, and both ways have there pitfalls.

You have to decide which is the better for your circumstances, ie. control of knowing you pay for exactly what you have used for that period, or a payment plan (direct debit) that can have pitfalls, but you gain slightly cheaper rates.

If you struggle in paying the bills, then direct debit may be the better, but if you dont, to save between £20 and £100 per year by direct debit, its much better to have control of what and when you pay every quarter

Cardew

Paying an annual £1,200 bill quarterly instead of a £100 monthly DD will produce less than £10 pa in interest.

Although DD discounts vary, savings up to £100 pa are possible.