🗳️ ELECTION 2024: THE MSE LEADERS' DEBATE Got a burning question you want us to ask the party leaders ahead of the general election? Submit your suggestions via this form or post them on our dedicated Forum board where you can see and upvote other users' questions. Please note that the Forum's rules on avoiding general political discussion still apply across all boards.

Energy Supplier Direct Debit - take control

Options
Hi,
  I would like to share my experience here regarding handling the Direct Debit (DD) with my energy supplier. I understand that this might not apply to everybody, but it is a solution that (so far) worked for me, so I decided to share it here.

My energy supplier (to which I was switched to when my previous one failed last year), only gives the best tariffs when you are on DD. This is common to most energy suppliers, so that they can then have a measure of control on their income from customers.
Ideally I would like to pay by credit card instead, because I get benefits (e.g. cashback/airmiles, which are worth getting if I pay my card balance in full every month so I don't get charged extra), but the benefits are not worth higher energy prices for a non-DD energy plan.

So earlier this year when my energy provider increased (again) my DD, I requested that they lower it to a set amount specified by me (I couldn't do this online, as I was only able to increase the DD amount, not lower it), after I cleared the outstanding amount showing on my energy account with a one-off card payment.
After a couple of days the energy supplier responded saying that they had changed the DD amount accordingly, with a warning that I would have to keep an eye on my energy account to prevent it going to much in the red.
Since then on receipt of my monthly bill I have been clearing the extra amount owed by paying by card, effectively getting the best of both worlds: DD plan rates, and credit card benefits (although only on the difference between DD and outstanding amount).

This might not work for people who prefer to spread the higher winter costs over the rest of the year, and for those who don't have any advantages paying by card, or for those who can't be bothered to do the admin every month. However it works for me, and if you are in a similar situation it might work for you too.

So far (the last few months) my energy supplier have not challenged this, nor have they tried to increase my DD again. Should they try to do that, I plan to go back and ask to retain the same amount I currently have, pointing out that my account has been pretty much balanced every month.
If things change, I will update here.

Comments

  • pochase
    pochase Posts: 3,449 Forumite
    First Anniversary First Post Name Dropper
    Options
    It would much less complicated if you just change to a variable direct debit.

    You submit monthly your meter readings, they bill you and debit a few days later your account for what you have used.
  • dunstonh
    dunstonh Posts: 116,685 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    Or you just set your monthly payment amount on the direct debit to average your annual usage.  (many suppliers have the ability to do this online.  Although some do not)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • wrf12345
    Options
    His point is that he gets money back by using his card and the lower kwh rates by using DD which he has managed to get set below that needed to cover his actual cost, so quite a clever twist. Every little helps.
Meet your Ambassadors

Categories

  • All Categories
  • 8 Election 2024: The MSE Leaders' Debate
  • 343.8K Banking & Borrowing
  • 250.3K Reduce Debt & Boost Income
  • 450K Spending & Discounts
  • 236K Work, Benefits & Business
  • 609.1K Mortgages, Homes & Bills
  • 173.4K Life & Family
  • 248.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards