3 Different types of direct debit

Superscrooge

rehanmalik3030 wrote: »

We all agree having a direct debit in place is a good thing. But what are the advantages and disadvantages of the the 3 different types offered by leading credit card companies.

Full amount, Fixed and Minimum.

I want to know what are the advantages and disadvantages of all 3.

Thanks in advance.

Do you like paying huge amounts of interest to credit card companies?

Unless you have a 0% or other low interest deal, I would always set a DD to clear the full balance and only use the card for purchases you could afford to make with cash.

The link posted earlier by grumbler is an excellent indicator of the dangers of only making the minimum payment at standard interest rates.

http://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card?&_ga=1.124343754.157308799.1449507210#

dazzaofdagenham

I have my Halifax credit card set up as the min taken by direct debit....also I have a standing order set up for a extra tenner.

This shows I am not just paying the minimum each month, then I am free also to make additional payments each month via a branch

redpete

rehanmalik3030 wrote: »

We all agree having a direct debit in place is a good thing.[

chattychappy's usually on these to say that he at least doesn't think they are a good thing.

But what are the advantages and disadvantages of the the 3 different types offered by leading credit card companies.

Full amount, Fixed and Minimum.

Full:
+ Never unwittingly leave a balance and incur interest; never forget to pay and incur late payment charge.
- Might take bank account into overdraft if you don't have enough money in it.
Fixed:
- Might pay more than you need; might pay less than you need (incurring interest and maybe late payment charge).
Minimum:
+ Never miss a payment or incur late payment charge; allows you to pay rest of the balance from different accounts if it suits the way you organise your money
- Can forget to pay the rest of the balance and incur interest.
All DDs:
- You have less flexibility.

All fairly obvious really.

grumbler

dazzaofdagenham wrote: »

... then I am free also to make additional payments each month via a branch

Anything wrong with online payments?

chattychappy

rehanmalik3030 wrote: »

We all agree having a direct debit in place is a good thing.

No we don't!

bearcat16

rehanmalik3030 wrote: »

We all agree having a direct debit in place is a good thing. But what are the advantages and disadvantages of the the 3 different types offered by leading credit card companies.

Full amount, Fixed and Minimum.

I want to know what are the advantages and disadvantages of all 3.

Thanks in advance.

Well this really depends on your personal strategy. What are you using the credit card for?

If you are stoozing on a 0% credit card then you'd pay just the minimum payment (and perhaps an extra £1 to avoid the min payment marker)

If you have a card balance on a 0% card that you're using as a cheap loan, many people simply divide the balance by the number of 0% months remaining and pay that fixed amount per month.

If you are using the card for everyday purchases then pay it off in full every month.

For me personally, I have 2 credit cards that I am stoozing, and 2 that I use for everyday purchases (Amex and Mastercard). I don't use direct debits for any because I like to be in control of how and when they are paid, so I pay the either by debit card online or by bank transfer.

planteria

i have never used a fixed DD.
i use Minimum DDs for Balance Transfer balances.
i use Full DDs for Spending cards.

Candyapple

planteria wrote: »

i have never used a fixed DD.
i use Minimum DDs for Balance Transfer balances.
i use Full DDs for Spending cards.

^^This.

Any card that is on 0% (purchases or balance transfers) is repaid by DD on min payment.

Also a lot of people have mentioned min payment markers, I can’t say this has ever affected my ability to get further credit or high limits and a lot of other posters on here are the same. Don’t forget that even though one, not all CRAs, might have this min payment marker, there are also others which have promotional rate markers which I presume if a lender was searching your files would see this and understand why there might be a min payment marker. Either way, it hasn’t made any difference to me. I would imagine other factors such as your repayment history, any late payments, your other debts and balances etc. would factor far higher than if you make the minimum repayments each month.

dresdendave

rehanmalik3030 wrote: »

I agree full payment direct debit is best but not everyone can afford to have this in place.

In which case it would suggest they are using a CC to live beyond their means. Posting an SOA on the DFW board would be a sensible step for anyone in this situation before their debts spiral out of control.

planteria

agree with Candy.. i've never been concerned by 'minimum payment markets' and i don't believe they are something anyone should care about. paying 1%/m back to MBNA at the moment. that's fine by me.