How do you get your credit card direct debit to work for you (D/D interest criteria)?

JustAnotherSaver

Terry_Towelling wrote: »

It's certainly an odd way to use a card and it kind of suggests the card is controlling the user rather than the user taking advantage of the deferred payment facility offered by all credit cards.

The best usage method is to use the CC for everything you'd normally buy with cash or DC. Each time you make a CC transaction, move the same amount of cash out of your current account (to avoid accidentally spending it) and put it in a 'safe' account (preferably one that pays you interest). As the CC billing cycle passes, your 'ring-fenced' cash pot increases by the same amount as the CC debt and you effectively control your spending in the same way as if you were still using cash/DC.

The only thing you then have to remember is to transfer back enough for a full payment from your 'ring-fenced' funds into the account that pays the direct debit a few days before it is due. That shouldn't be an issue because your CC statement tells you when the DD will be taken.

I'm with you on the abbreviations ... except for DC?


As for how this has been ran - my sister for example will have 2 direct debits required for Club Lloyds, Halifax (solo & joint), Bank of Scotland, so on & so forth.
One of her Bank of Scotland accounts she uses to put all her birthday & Xmas money as that's how she chooses to keep it separate.

So let's say her Halifax credit card is tied to that BoS account. She buys a £1 scratchcard that she'd buy anyway, she sends £1 from her every day current account to her Birthday/Xmas BoS account and when the direct debit is taken it doesn't actually touch any of her birthday money but it does generate a direct debit & therefore the account earns interest (simplified).


If she's not in town but i am then i may use it to do my weekly shop. It comes to £50, i transfer £50 to her account, job done.


Now this £50 or £1 or whatever could be kept in a savings account, but like you said, it's money that'd be spent anyway & we'd rather it was just in the account it needs to be in and then you don't even need to think about it.

surreysaver

JustAnotherSaver wrote: »

I'm with you on the abbreviations ... except for DC?

Debit card

JustAnotherSaver wrote: »

We were under the impression that if you spend shortly after the direct debit is taken then you should be good to trigger a payment for the next months direct debit. That's how it was being worked. Not necessarily a spend within a calendar month but a spend shortly after a direct debit is taken.

Will take a closer look. Thanks for the explanation.

You need to spend shortly after the statement is produced - not when the direct debit is taken. If you work it on the basis of when the direct debit is taken, you run the risk of the purchase missing a statement and appearing on the one a month later, as statements tend to be produced within days of a direct debit being taken.

badger09

As Terry Towelling & surreysaver have said, you/your sister needs to make a small purchase on the credit card (being used to generate direct debit for interest/reward) shortly after the statement date. That way, you are sure the required direct debit will be taken each month.

I have 3 credit cards which are mainly used for this purpose, though I also use the Halifax Clarity & Post Office cards for spending abroad.

In my phone, I keep a note of the balance, normal statement and due date. As soon as a statement is produced (mostly paperless online), I note the exact date, with a prominent note 'USE'. As soon as I've used each card, I update the balance.

It's a bit of a faff, but guarantees the required direct debits for interest etc, and I can see at a glance which card I need to use next;)