What to do with credit from old supplier

Oblamov_boblamov

Hi, I have recently switched energy supplier (using the Cheap Energy Club I might add, really quickly and pain free) and the credit I built up with my previous supplier has been refunded to me. As the winter months are approaching, I am wondering whether I should add this credit to my new account or not. If I do is it likely they will reduce my DD,  or if I don't will they increase it? Or do I just leave it in my bank account and pay any shortfall if required? Anyone have any thoughts on this? Thanks

debitcardmayhem

Simple put it in an interest bearing account

EssexHebridean

I’d ring fence it into an interest bearing account as suggested above, but keep it ready in case it was needed to add to the account over winter. There’s no sense in paying it out until you know what the situation is  though.

Scot_39

Oblamov_boblamov said:

Hi, I have recently switched energy supplier (using the Cheap Energy Club I might add, really quickly and pain free) and the credit I built up with my previous supplier has been refunded to me. As the winter months are approaching, I am wondering whether I should add this credit to my new account or not. If I do is it likely they will reduce my DD,  or if I don't will they increase it? Or do I just leave it in my bank account and pay any shortfall if required? Anyone have any thoughts on this? Thanks

Different suppliers have different ways of balancing what I assume is an annualised DD.  And they may well already have done some winter vs summer adjustment on the initial DD level.

And msny if not all are moving to minimum credit balances.

They might however have quoted something closer to annual/12 - and then seek to increase it as bills higher in winter if set that low.

But remember its easier to increase a DD manually than drop it manually - most won't allow if end up in debit after winter.

I can see the logic of holding but ring fence and see where they go to in coming months one they see your winter use.  But Id be wary about the DD rise that could follow.

But whilst theirs a lot of concern expressed about firms holding Positive balances the reality is the £££ you gain in interest by holding it yourself instead can be very small - especially relative to dd vs standard credit billing savings - was c£120 at cap tdcv..

Id maybe adjust my DD as the interest on say a few £100s these days might not be worth the effort. And might be a temptation to spend say on a Xmas treat or two if keep it, or end up with a crass dd estimate after a few months.

You could try adding a fraction of the credit - say nominally credit /12 to your DD - it that credit largely just for this year at old sup0lier - as that could be the same sort of credit they might expect at this time of year by next year.

I am a low heat user as a share of my annual energy use - but its all electric - so expensive - and am just over 1.5 x annual DD on last months bill - but by time apl 3 nshs i use for heating go on full time (as late as Nov /Dec in some years recently) likely over 2x monthly DD in credit.  A high heat share in costs terms  might be 2-3x monthly in credit by now.

There is no one suits all core answer.

The thing to do is not forget when a credit offset giving a drop in DD taken ends  and then be shocked / struggle to cope.  So if say you paid it all dont think thats th3 real cost -  they might drop your dd for x months then step it up - so you need to remeber the true /12 figure once say cyclic debit or credit resolved..