Paying via Standing Order

tidds

Good Morning,

Hopefully this is a simple one and it feels like it makes sense but I want to check. I have a credit card with a 0% for 40 months that I intend to pay off slightly more than the right amount per month to ensure it's cleared before the deal ends.

However, Direct Debit I have the option of minimum payment, which changes month on month as the balance decreases - or full amount, which isn't the option I want.

Thus, if I was to set up a standing order - with no direct debit payment would this suffice? As the account would still receive monies each month. How would I know the date to set up the Standing Order for? Bill comes out on the 9th each month, and is due by the following 4th.

Any help greatly appreciated!

Thanks

Paully232000

Personally, if it was me I would set up the DD for the min payment, and then an additional payment via standing order (or any other means you wish) to pay any extra.
Then you dont run the risk of the standing order being paid before the months due date and getting charged a fee, and possibly losing your 0% deal.
Plus you get the added beneft of the DD guarantee for payments, should there be a problem

tidds

I was thinking that, but then each month it'll be Standing Order + A strange DD amount. (Well, 1% of the remaining balance).

But actually, I like that idea more than the risk of issues with payment.

Paully232000

or, just set up a direct debit to the CC. Then, depending on whether it is worth it, you could set up a standing order to a savings account each month instead of your CC, and then at the end of the 40 months pay off the CC remaining balance.

jjj1980

If you do the SO and DD, make sure the SO goes out after the DD as otherwise, depending on the card, the DD amount may just be reduced by the SO amount

Nasqueron

Are you sure you can't manually set the DD amount? Maybe ask the BT people to amend the DD or similar? Barclaycard for example on their web portal allow you to specify an amount of the DD each month

agrinnall

jjj1980 wrote: »

If you do the SO and DD, make sure the SO goes out after the DD as otherwise, depending on the card, the DD amount may just be reduced by the SO amount

You're right about the reason for suggesting this, but the problem is likely to be that the DD will be taken only a short time before the payment is due, which may not leave enough time to get a SO processed too.

If the OP really wants to do this I'd drop the DD altogether and have a monthly SO set up for a date that's a week or so before the due date - but bear in mind that the due date may not be constant, some card issuers change it more than others.

Personally I would do a manual payment each month, but that does require considerable discipline to ensure it's done every month, on time, and for the appropriate amount.

tidds

Yeah - this is MBNA and i've checked on the web login, unfortunately not I only get two options:



@Paully232000 Great idea on the savings, I do already have SO going to Savings. However, with all the house redevelopment i'm doing I don't feel this is the best option as there is a chance i'd just spend some of the money on contractors etc (I have self control, but not enough :P hence wanting to set up a payment)

@jjj1980 useful comment. I didn't consider that, thank you.

tidds

agrinnall wrote: »

You're right about the reason for suggesting this, but the problem is likely to be that the DD will be taken only a short time before the payment is due, which may not leave enough time to get a SO processed too.

If the OP really wants to do this I'd drop the DD altogether and have a monthly SO set up for a date that's a week or so before the due date - but bear in mind that the due date may not be constant, some card issuers change it more than others.

Personally I would do a manual payment each month, but that does require considerable discipline to ensure it's done every month, on time, and for the appropriate amount.

I considered this and I do have the discipline for manual, as I tend to move money around once i've been paid to investments, savings etc. (Hopefully I won't get the comment of pay off your cc with your investments/savings from somebody )

But, I don't like this option on the off chance I do accidentally forget - which I feel there is miniscule chance, but the risk is too high, as i'd lose the 0% interest.

Anthorn

tidds wrote: »

Good Morning,

Hopefully this is a simple one and it feels like it makes sense but I want to check. I have a credit card with a 0% for 40 months that I intend to pay off slightly more than the right amount per month to ensure it's cleared before the deal ends.

However, Direct Debit I have the option of minimum payment, which changes month on month as the balance decreases - or full amount, which isn't the option I want.

Thus, if I was to set up a standing order - with no direct debit payment would this suffice? As the account would still receive monies each month. How would I know the date to set up the Standing Order for? Bill comes out on the 9th each month, and is due by the following 4th.

Any help greatly appreciated!

Thanks

I don't see why not a standing order. The only problem I have with it is the need to keep an eye on the minimum payment and the due date in case that changes. The other problem is how long the standing order takes to get there: A static date could occur during a weekend: While faster payments for example are processed 24/7/365 that may not be true of the destination account.

Overall I prefer a direct debit backed up with a standing order or manual transfer.

bengal-stripe

tidds wrote: »

How would I know the date to set up the Standing Order for? Bill comes out on the 9th each month, and is due by the following 4th.

If you feel better using a Standing Order, set it up slap-bang between those two dates: somewhere around the 22nd. This way it won't hit the account early (to end up on the previous month), nor late (even of the date the money is leaving the account gets delayed by a weekend.)

Nevertheless, check periodically that neither statement nor due date have changed significantly.