Best way to pay bills from bank account ?

thewinkshow

Anyone got any tips an tricks , I am thinking of setting up a 2nd bills only account and transferring money over - will use a credit card to pay bills then transfer over . Anyone do this?

Who is best free current Account for this ?

EarthBoy

thewinkshow wrote: »

.. will use a credit card to pay bills then transfer over ...

Be careful paying bills with a credit card. Some (not all) credit cards class paying bills as cash withdrawals, so you would be charged interest from the date of the payment.

NFH

I run a separate account for direct debits with a zero balance and deliberate zero overdraft limit, primarily because of companies that refuse to receive payments other than by DD or which make a surcharge for DD. When a DD is due, a standing order goes into the account to cover it. If a company tries to take too much money or too early, it gets rejected and my bank charges me a fee. The company then has to reimbuse the bank charge. It works very well and catches out a lot of naughty companies who don't stick to the DD guarantee. This arrangement successfully prevents companies from getting access to the contents of my main bank account.

NFH

EarthBoy wrote: »

Be careful paying bills with a credit card. Some (not all) credit cards class paying bills as cash withdrawals, so you would be charged interest from the date of the payment.

Which cards do this? And how would the card issuer be able to identify or define a bill payment as distinct from any other type of purchase?

Bloomberg

NFH wrote: »

Which cards do this? And how would the card issuer be able to identify or define a bill payment as distinct from any other type of purchase?

It will be the organisation which you are paying that could possibly charge you not your bank. I am not sure about the utility companies but I do know that some councils charge extra if you pay your council tax with a credit card.

Bloomberg

thewinkshow wrote: »

Anyone got any tips an tricks , I am thinking of setting up a 2nd bills only account and transferring money over - will use a credit card to pay bills then transfer over . Anyone do this?

Who is best free current Account for this ?

As mentioned in my previous post paying bills with a credit card can sometimes incur extra charges for you. There is no reason why your existing bank will not offer you a second current account for bills. I have two current accounts with my bank, one is strictly for bills. All the best.

jamesd

A different account that has an overdraft facility high enough to cover a month's worth of bills is convenient and provides protection against bank charges for glitches, whether they are yours or that of the companies being paid. I've used to standing order payments into one in the past, one near the start of the month, one nearer the middle. The money earns interest in a different account until then.

Tupperware_Queen

I get my wages paid in, dd's and so's go out, I work out what should be left over, and transfer that into another account - which I use for spending. works fine for me

YorkshireBoy

NFH wrote: »

If a company tries to take too much money or too early, it gets rejected and my bank charges me a fee. The company then has to reimbuse the bank charge.

What about the damage to your credit file?

The bank may be reporting a '1' for that month, denoting...

Cheques, direct debits and standing orders may have been bounced to keep the account in order.

http://www.experian.co.uk/downloads/consumer/YCREJul08.pdf (page 15)

Much better, as jamesd suggests above, to have a small overdraft facility in place.

YorkshireBoy

NFH wrote: »

...how would the card issuer be able to identify or define a bill payment as distinct from any other type of purchase?

Google "merchant category code".

NFH

YorkshireBoy wrote: »

What about the damage to your credit file?

Good point. I hadn't thought of that. However, usually I've spotted the error before the bank rejects it and have specifically asked my bank to reject the DD as "amount not due". This doesn't incur any charges.