Direct debit vs manual payments

Ben8282

Are we talking about a full balance direct debit here? If yes, and assuming you are not one of this people with such a low credit limit that they have to make payments throughout the month in order to be able to put a normal monthly spend through the card, the only likely problem that I can foresee would be if you wished to pay by balance transfer. In such a case you would probably need to make the balance transfer in the previous statement period so you would pay it off before the statement was issued. Most people with full balance direct debits don't make additional payments prior to the direct debit being taken as there is no point.

Missus_Hyde

I have DD's for the full amount set up to pay every month on all our credit cards.

Frankly, I can't understand why anyone wouldn't, as it saves mucking around with different payment dates for different cards and in case I should get run over by a bus (or some such eventuality) then my husband wouldn't need to worry about any payments due, or my estate being charged unnecessary interest.

PixelPound

It depends on the scenario, but I can't see what the fuss is all about.

Are you not clearing the balance each time? Or if not is it because it is on a promo rate, or have you ongoing debt being charged interest every month.

sky1802

I saw someone mention above that CRAs see no difference between payments received via DD or manual payment. Does the same go for credit building cards?

Willing2Learn

sky1802 wrote: »

I saw someone mention above that CRAs see no difference between payments received via DD or manual payment. Does the same go for credit building cards?

The same goes for all cards, whether credit building or not.

Jami74

I have a dd for full amount on the credit card which charges interest. I have made an additional payment on it when I've spent lots but it hasn't mattered as I used the card the following month anyway.

On my 0% cards I have dd for minimum amounts set up and pay chunks in as and when I get paid. Once the 0% ends I'll set the dd to full amount.

Penelopa.Pitstop

Amex takes full payment by DD earlier than minimum payment and earlier than deadline. It really annoyed me, that they were taking full payment 2 weeks before due date. I switched to minimal, which is now week later and I pay rest manually.

Minimum payment covers in case of some emergency and bad marks on my credit file. I can live with interest on the unpaid umount, but so far it never happened.

chattychappy

I manage perfectly well without DDs. It's a good discipline in my view. I don't like them and they can go wrong. The so-called "DD guarantee" doesn't cover all situations and even when it does, the onus is on you to query something that has gone wrong. The issue has been done to death before and certainly many people don't have any issues with them.

Main points to bear in mind with DDs:

1) Great if you tend to "forget". But if you've forgotten to make payment then there is a good chance you might have forgotten to have the funds ready for a DD. So a DD could bounce - more charges.

2) Some DDers lose the incentive to check statements. We often get posters who have gone months before they realise a fraud has happened, a BT deal wasn't applied properly etc. etc.

3) There can be a delay before a DD kicks in. Ensure your statement says that payment will be taken by DD before relying on it.

4) DDs can expire (?13 months). So if you bring a dormant CC back to life, bear in mind that the DD might no longer be active.

5) If you're paying interest, then pay as much as you can as soon as you can. The problem with DD is that you can have the funds hanging in your current account waiting for DD day whilst you are needlessly paying interest on the CC.

PamWatts

DD do help, if you are busy and likely to forget payment dates.

Vortigern

Penelopa.Pitstop wrote: »

Amex takes full payment by DD earlier than minimum payment and earlier than deadline. It really annoyed me, that they were taking full payment 2 weeks before due date. I switched to minimal, which is now week later and I pay rest manually.

My preferred method for Amex is to set up a future dated faster payment for the full balance, as soon as my statement is issued.