Is a direct debit for credit card ever too high?

irelavv

I haven't posted in a long while but I often check this forum as it has been very helpful throughout the years. Like many people here, I have been taking advantage of a 0% purchase card (18 months promo period) and the time has come to pay it all off.

My question relates to the final payment of a 0% purchase card I have with Lloyds. 
Would it be okay if I change the direct debit amount from minimum to full before the 18th monthly statement is generated? By doing that, I would have repaid all the money owed before the promo period ends. 

Here are a few key dates: 14 March - statement generated, 11 April - Direct Debit payment, 23 April - end of promotional period on new purchases.

I'm only asking this question as I have never paid such a big amount of money via DD before and maybe I'm a bit cautious of any hidden T&Cs. The most I've paid is around £60 since I've never stoozed in the past. 

Thanks for any help!

MorningcoffeeIV

A direct debit can never be too high. You may be thinking of standing orders.

You will need to be very precise on your timings to amend for the last statement. Do it as soon as your previous statement is generated, so that it is processed in time.

Easier to just make a manual top up payment though.


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DE_612183

why not just make a one-off payment to clear the balance?

JuliusCaesar

Why pay it off? You could take out another interest-free balance transfer card and transfer the debt. Even if you have to pay a 3% BT fee, with a decent interest-free period of 18 months or more you would still make a profit if you invested the money in a savings account paying around 5%.

elkiedee

If you decide to settle it or are able to get a balance transfer card, better to just make an extra payment/make the transfer before 23 April, as you then work out how much to pay and when in relation to your circumstances, and have more control over it. You could make it just after that Direct Debit on Thursday 11 April (so Friday 12 or Monday 15 April) or in March - if you pay off before the DD falls due, check how your particular card treats extra repayments in relation to minimum payments.

And if you do get a balance transfer card, don't spend on it! However you cover new spending, keep it separate from any balance.

Fingerbobs

I have oft considered doing this, but have never actually done it. The timings seem too critical, and I like to be in control of that final payment. 

I also pay off the card two weeks before the end of the 0% period. Some may consider that over-cautious, but if the payment fails or is delayed for any reason (e.g. fraud/AML checks) I like to allow time to rectify things before being charged interest.

Nasqueron

Fingerbobs said:

I have oft considered doing this, but have never actually done it. The timings seem too critical, and I like to be in control of that final payment. 

I also pay off the card two weeks before the end of the 0% period. Some may consider that over-cautious, but if the payment fails or is delayed for any reason (e.g. fraud/AML checks) I like to allow time to rectify things before being charged interest.

I agree, my BT cards are always paid off on the basis of balance / number of months of offer such that if the offer runs to say 1/1/26 the final payment will be the DD taken say 15/12/25 - just in case there are any issues.

born_again

JuliusCaesar said:

Why pay it off? You could take out another interest-free balance transfer card and transfer the debt. Even if you have to pay a 3% BT fee, with a decent interest-free period of 18 months or more you would still make a profit if you invested the money in a savings account paying around 5%.

Which is Ok, but as many found out due to covid. They suddenly did not have the funds & all offers dried up.
So ended up paying interest, they could ill afford.

Nasqueron

born_again said:

JuliusCaesar said:

Why pay it off? You could take out another interest-free balance transfer card and transfer the debt. Even if you have to pay a 3% BT fee, with a decent interest-free period of 18 months or more you would still make a profit if you invested the money in a savings account paying around 5%.

Which is Ok, but as many found out due to covid. They suddenly did not have the funds & all offers dried up.
So ended up paying interest, they could ill afford.

Exactly why I pay the money off monthly rather than minimum and having the money elsewhere, too risk averse on debt to want to gamble on either a new BT offer or not having an emergency taking the funds

Fingerbobs

Nasqueron said:

born_again said:

JuliusCaesar said:

Why pay it off? You could take out another interest-free balance transfer card and transfer the debt. Even if you have to pay a 3% BT fee, with a decent interest-free period of 18 months or more you would still make a profit if you invested the money in a savings account paying around 5%.

Which is Ok, but as many found out due to covid. They suddenly did not have the funds & all offers dried up.
So ended up paying interest, they could ill afford.

Exactly why I pay the money off monthly rather than minimum and having the money elsewhere, too risk averse on debt to want to gamble on either a new BT offer or not having an emergency taking the funds

I keep the money to pay off all of my cards in a ring-fenced, instant-access savings account, which I never touch unless I am withdrawing to pay off a card (or occasionally to move the funds to a better-paying account). It's a separate account only for the stoozpot. Minimum payments just come out of my current account. 

irelavv

Thank you so much for the help! I've read all your replies and actually decided to go for a BT card. I've never applied for one before, so am hopeful to get the one from NatWest with both 0% fee and 12 mth no interest. If I get declined, I'll just utilize TSB's offer for a 3% fee as it would save me around £50 in the long run...
And if I don't get any decent offers I'll just tweak the DD as soon as the last promo statement is generated.

elkiedee said:

And if you do get a balance transfer card, don't spend on it! However you cover new spending, keep it separate from any balance.

Really important tip for BT newbies such as myself! Thank you