Paying Direct Debits with Credit Card

bigroman

Is it possible? For example a current direct debit going through a debit card, if the details were to be changed to a credit card details is that possible?


Also, what affect would it have in regards to the credit rating?

[Deleted User]

You need to ask the supplier if they accept CPAs by credit cards.

Your direct debit goes through your current account, not your card.

Your credit files will show if a card is being used, along with their balances and payments.

wavelets

bigroman wrote: »

Is it possible? For example a current direct debit going through a debit card, if the details were to be changed to a credit card details is that possible?


Also, what affect would it have in regards to the credit rating?

Be very careful here.

As mentioned above, a direct debit is collected direct from your bank account after you have agreed to the set up of a Direct Debit Instruction. Payment via a debit card is not a direct debit, and hence you will not be covered by the terms of the direct debit guarantee.

It soounds like you have agreed a CPA (Continuous Payment Authority) with the supplier to charge your debit card on a regular basis. Most suppliers will allow you to change those card details if you wish, and most who accept debit cards will equally accept credit cards - but the supplier will confirm that when you contact them.

As long as the supplier's bills continue to be paid on time and in full, it should not affect your credit rating.

Terry_Towelling

As stated by zx81, what you are talking about is a Continuous Payment Authority (CPA). Each transaction processed as part of a series is known as a Recurring Transaction (RT). This is like a Direct Debit except in a few key areas.

Firstly, the retailer involved has to be able to accept cards because the payment is taken from a debit or credit card.

Secondly, the mandate is not held by your bank but by the retailer, so any cancellations are supposed to be made via the retailer direct. That said, there are now facilities in place to enable your card provider to forward a cancellation request for you but that doesn't necessarily mean you won't be charged and, if you are in a contract with a retailer, asking for payments to stop doesn't mean you're out of your contract and you may still be liable to make all remaining payments by some other means.

Thirdly, you do not have the protection of the Direct Debit guarantee, so refund requests must be made to the retailer. In the event of a dispute, if the retailer won't help, you would need to ask your card provider if there are any rights under the Visa/MasterCard rules to obtain a refund (e.g. Chargeback).

Presumably, your credit rating will only be affected if the payments you are making form part of a credit agreement.

adindas

bigroman wrote: »

Is it possible? For example a current direct debit going through a debit card, if the details were to be changed to a credit card details is that possible?

Also, what affect would it have in regards to the credit rating?

I wonder what are you trying to achieve here ?.
Why do you want to change a direct debit to CPA using debit card where you have little control ? Any particular reason ??

Keep in mind with DD you could cancel it by yourself. With CPA you have less control.

redux

adindas wrote: »

I wonder what are you trying to achieve here ?.
Why do you want to change a direct debit to CPA using debit card where you have little control ? Any particular reason ??

Keep in mind with DD you could cancel it by yourself. With CPA you have less control.

You're mentioning debit card, though the question might be about credit card (though there is a slight confusion of DD and debit card as the current state, already answered). I'm not arguing about that though.

As far as CPA goes, it's probably about the same picture for debit and credit cards, I assume though don't know precisely, but perhaps for some people there is an interesting point arising from your question.

If someone is making a regular payment, but might have occasional difficulty some months, for instance someone with a repayment arrangement with a debt collection agency, then a card authority may be slightly better for them financially. If a direct debit is declined by the bank, this may incur a fee by the bank, whereas a debit card payment declined incurs no fee.

PRAISETHESUN

As has been mentioned, this is a continuous payment authority (CPA) not a direct debit (DD). It would depend on the merchant in question as to whether or not they would/could accept payment in this way. It would only affect your credit file if the payments were for something reportable to the CRAs, like a loan, insurance or the like.

If you have a choice in the matter, opt for a DD rather than a CPA as has been mentioned - you have way more protections when using DDs.

jonesMUFCforever

If you pay everything on time then doing what OP wants will not have any effect on your credit rating.
It will also not count towards D/D 's if someone is short for account transfer purposes.

chattychappy

PRAISETHESUN wrote: »

If you have a choice in the matter, opt for a DD rather than a CPA as has been mentioned - you have way more protections when using DDs.

Personally I'm happy with CPAs, but not DDs. These days a DD doesn't really offer any more protection than a CPA. In fact, the joy of CPAs is that if a CPA goes wrong, it is not my money that is taken, but the CCs. I am simply disputing a charge. I have plenty of spare limit on my cards, so there are no knock-on effects. That is not true of my current account where a DD wrongly taken could have knock on effects in terms of bounced transactions until I can get it sorted.

With a CPA you are entitled to cancel via the payment institution just as with DDs. This was an effect of the Payment Service Regulations, though it was a while before the CCs (and MSE) "caught up".

The one time I had a problem with a CPA, MBNA were most helpful in killing it off future charges as well as reversing the ones I disputed.