Increased bills due to no direct debit - Eon Next

Mstty

When I signed up to the two year fix with Eon Next it was clear there is a 5% discount for paying by Direct debit.

So your 1% on the debit card and losing the 5% is really not financially savvy.

Savedotmoney

Astria said:

The way they normally get around is that they don't charge you for using your credit/debit card, and there's no surcharge for pay on receipt of bill.

However, they is a discount if you decide to pay by direct debit as it's far cheaper to collect payments via direct debits.

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Unfortunately, I can't get the cashback via Direct Debits. 

I've changed the payment type on a few of my other utility bills and haven't been charged more for the privilege of doing that. I don't buy the "I'm a higher risk" thing, I've never missed a bill payment and if I was really intent on not paying I would cancel my direct debit in time to not cover the payment. 

Taking payments from me via debit card all year doesn't amount to £115 more. 

Savedotmoney

Mstty said:

When I signed up to the two year fix with Eon Next it was clear there is a 5% discount for paying by Direct debit.

So your 1% on the debit card and losing the 5% is really not financially savvy.

Well having had two opposing responses from Eon when I called/emailed them I've discovered that now and will set up the DD. 

The fees for paying by debit card as opposed to DD are not proportionate IMO. But then, neither is life. *Eagerly awaits energy company profit reports*

TheMilkmansDad

Savedotmoney said:

Taking payments from me via debit card all year doesn't amount to £115 more. 

Apparently it does in their eyes. Rightly or wrongly is irrelevant as others have said above.

On the bright side, changing to DD would save you £115 though.

Ultrasonic

Savedotmoney said:

Astria said:

The way they normally get around is that they don't charge you for using your credit/debit card, and there's no surcharge for pay on receipt of bill.

However, they is a discount if you decide to pay by direct debit as it's far cheaper to collect payments via direct debits.

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Unfortunately, I can't get the cashback via Direct Debits. 

I've changed the payment type on a few of my other utility bills and haven't been charged more for the privilege of doing that. I don't buy the "I'm a higher risk" thing, I've never missed a bill payment and if I was really intent on not paying I would cancel my direct debit in time to not cover the payment. 

Taking payments from me via debit card all year doesn't amount to £115 more. 

How much is your total annual bill. Card payments are normally a percentage of the payment amount I believe, so the larger your bills the more believable the £115 figure would be.

Savedotmoney

Ultrasonic said:

Savedotmoney said:

Astria said:

The way they normally get around is that they don't charge you for using your credit/debit card, and there's no surcharge for pay on receipt of bill.

However, they is a discount if you decide to pay by direct debit as it's far cheaper to collect payments via direct debits.

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Unfortunately, I can't get the cashback via Direct Debits. 

I've changed the payment type on a few of my other utility bills and haven't been charged more for the privilege of doing that. I don't buy the "I'm a higher risk" thing, I've never missed a bill payment and if I was really intent on not paying I would cancel my direct debit in time to not cover the payment. 

Taking payments from me via debit card all year doesn't amount to £115 more. 

How much is your total annual bill. Card payments are normally a percentage of the payment amount I believe, so the larger your bills the more believable the £115 figure would be.

Probably £5632.

About £1660 for the year at the current prices...

Astria

Ultrasonic said:

Astria said:

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Santander? I do the same but there is an account fee to factor in too of course.

Yes, that is true.

So if we factor that in.

£125/month on council tax, £30/month on water, and £110 on gas and electric, you would break even.

There are better accounts for the current 0.5% interest rate however.

k_man

Astria said:

Ultrasonic said:

Astria said:

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Santander? I do the same but there is an account fee to factor in too of course.

Yes, that is true.

So if we factor that in.

£125/month on council tax, £30/month on water, and £110 on gas and electric, you would break even.

There are better accounts for the current 0.5% interest rate however.

123 Lite is only £2 per month, same cashback, but no interest.

MattMattMattUK

Savedotmoney said:

Ultrasonic said:

Savedotmoney said:

Astria said:

The way they normally get around is that they don't charge you for using your credit/debit card, and there's no surcharge for pay on receipt of bill.

However, they is a discount if you decide to pay by direct debit as it's far cheaper to collect payments via direct debits.

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Unfortunately, I can't get the cashback via Direct Debits. 

I've changed the payment type on a few of my other utility bills and haven't been charged more for the privilege of doing that. I don't buy the "I'm a higher risk" thing, I've never missed a bill payment and if I was really intent on not paying I would cancel my direct debit in time to not cover the payment. 

Taking payments from me via debit card all year doesn't amount to £115 more. 

How much is your total annual bill. Card payments are normally a percentage of the payment amount I believe, so the larger your bills the more believable the £115 figure would be.

Probably £5632.

About £1660 for the year at the current prices...

Based on the volumes they probably put through and so the rates they will get they are probably paying a percentage fee of around 0.68-1.1% of the transaction value to the card networks, plus around 10-12p per transaction. The percentage fee is of the inc. VAT amount so it is slightly higher as a percentage of the net figure. On top of that there is the cost of maintaining the card system integration and the additional regulatory requirements they face so overall a rough estimate of the cost of processing cards would be around 1.2-1.5% of the transaction value. The factor I can't guess at though is the increased default rate and the cost of chasing for people who are not on Direct Debit, but as the regulator has reviewed it and agreed that non-DD payers can be charged more and that basis is an additional cost it would be reasonable to assume it reflects that cost. 

Ultrasonic

k_man said:

Astria said:

Ultrasonic said:

Astria said:

I still get 2% cashback on my direct debits to Sainsburys Energy however and don't have to hassle of having to make a payment every month

Santander? I do the same but there is an account fee to factor in too of course.

Yes, that is true.

So if we factor that in.

£125/month on council tax, £30/month on water, and £110 on gas and electric, you would break even.

There are better accounts for the current 0.5% interest rate however.

123 Lite is only £2 per month, same cashback, but no interest.

Yes, that's the account I have now, switching to it a good while ago from the full 123 account. Worth you looking into @Astria, and for info. switching between the two versions was really easy when I did it.