Payday, spending and direct debits

bambilegs

Evening all,

I’ve heard of some people moving the amounts that they’ve spend on their credit card, away into a separate account, which they move back when their direct debit is due.

Those who do this, if your direct debit aligns with when you get paid or thereabouts,  do you still do this or do you just let your new pay clear the balance?

Desmond_Hume

My payment is a few days after payday. I still transfer spent amounts into a separate acccounr though and just get the DD taken from there. That way it’s ring fenced and requires no additional thought or action from me. 

bambilegs

Desmond_Hume said:

My payment is a few days after payday. I still transfer spent amounts into a separate acccounr though and just get the DD taken from there. That way it’s ring fenced and requires no additional thought or action from me. 

Thank you… that makes sense. This is an option… I have a new CC basically and I’m thinking of doing this, so this might be a shout.

Do you find it a faff moving the separate amounts? Do you do it daily etc or straight after using the credit card? Haha teach me your ways 

Desmond_Hume

bambilegs said:

Desmond_Hume said:

My payment is a few days after payday. I still transfer spent amounts into a separate acccounr though and just get the DD taken from there. That way it’s ring fenced and requires no additional thought or action from me. 

Thank you… that makes sense. This is an option… I have a new CC basically and I’m thinking of doing this, so this might be a shout.

Do you find it a faff moving the separate amounts? Do you do it daily etc or straight after using the credit card? Haha teach me your ways 

Haha, sure.

I personally do it after every transaction.  I then use the "Reference" to show what the vendor was.  That way, when the statement come's in at the end of the month, I can look down it and a bank statement and cross reference every CC spend with a BACS transfer to the account the CC balance is paid from.

Is it a faff?  Can be.  Christmas can be as there is a lot of spending going on then.  It wouldn't be the first time I have had to trawl through the above mentioned items to find why I'm £3.50 short (that meal deal I bought when rushing around and forgot to transfer...). I'm yet to miss a payment or be short at the end of the month though, so my system works (for me).  Been doing it a few years now.

Some will find it a convoluted system and it may be so.  It stems from "scars" gained after being with a plastic happy (now) ex-wife though.  Eek.

bambilegs

Desmond_Hume said:

bambilegs said:

Desmond_Hume said:

My payment is a few days after payday. I still transfer spent amounts into a separate acccounr though and just get the DD taken from there. That way it’s ring fenced and requires no additional thought or action from me. 

Thank you… that makes sense. This is an option… I have a new CC basically and I’m thinking of doing this, so this might be a shout.

Do you find it a faff moving the separate amounts? Do you do it daily etc or straight after using the credit card? Haha teach me your ways 

Haha, sure.

I personally do it after every transaction.  I then use the "Reference" to show what the vendor was.  That way, when the statement come's in at the end of the month, I can look down it and a bank statement and cross reference every CC spend with a BACS transfer to the account the CC balance is paid from.

Is it a faff?  Can be.  Christmas can be as there is a lot of spending going on then.  It wouldn't be the first time I have had to trawl through the above mentioned items to find why I'm £3.50 short (that meal deal I bought when rushing around and forgot to transfer...). I'm yet to miss a payment or be short at the end of the month though, so my system works (for me).  Been doing it a few years now.

Some will find it a convoluted system and it may be so.  It stems from "scars" gained after being with a plastic happy (now) ex-wife though.  Eek.

Oh bless you, thank you Desmond.. much appreciated. And yeah, that’s definitely PTSD you got there haha.

MrFrugalFever

I don't have any DD's setup for my CC's as I like to pay when it suits (up to and including the pay dates on statements), but if I did have a DD setup i'd have them coming out of my Kroo Current Account where my money would earn 4.34% AER on the balance.

I like to maximise the 'up to 56 days interest free' period by putting money in to my savings until statement payment is due. 

PloughmansLunch

I use Kroo for transferring purchases for one card, and you can open multiple savings accounts in Chase that allow direct debits so I have three there to transfer into for other cards.
Chase savings all have unique account numbers so each is set up as a payee in various current accounts. I try to transfer cash as soon as possible and end up with a reasonable amount of rolling interest each month, plus continually building up reward points/Avios.

Amex doesn’t play nicely with Chase savings accounts for DDs so I set up a scheduled payment from savings for the statement balance into a high street bank account the day before the direct debit is due.

I know with more admin I could be earning more interest elsewhere, but having the direct debits to automatically pay off each statement in full (or minimum if 0% promo offer/stoozing) means it all runs smoothly and I can fire and forget once the cash for purchases has been moved over. 

enthusiasticsaver

No, I cannot be bothered with moving money around to pay credit cards.  All our bills and payments come out the beginning of the month after our pensions/drawdowns are paid  in including our credit card payment which  is paid in full.  I make it a rule not to buy stuff until I have worked out what is left after direct debits paid, credit card paid and money moved over to various savings pots.