Why Don't People Use Direct Debit??

YorkshireBoy

exel1966 wrote: »

I'm trying to find online details for The John Lewis Partnership credit card run by HSBC (i think) as this is one which operates this exact policy.

Your memory is good exel. From one of my old Partnership card statements...

For your information, a Direct Debit of £xx.xx will be collected from your account on xx/xx/xx or the nearest working day prior to this date.

My emboldening.

exel1966

prof_writer wrote: »

Actually, tastes differ, Some people prefer credit cards, when others still use debit cards to pay directly. Each of these cards has its own advantages and disadvantages. So it is not wise o prefer one to another. But the main matter is to provide your card's security for Identity-theft protection. It also concerns debit cards.

Consumer advocates always recommend to choose only PIN-based direct debit cards only,instead of a signature-based one. Because in second case anyone could pick up the card and benefit it.

:spam: Alert !!!!

clio

I can see why people dislike direct debits, Ive noticed with my isp who i have to pay by DD becuse it,s a £1
cheaper is this normal and the reason DD,s are not liked. today is 23rd and ive just done my online banking
and direct debit has been taken. i get email from isp but it never go's when they say, it,s allways earlier than
the date given in email..

" Dear Customer,

Your monthly invoice has been raised and will be collected by Direct Debit on or around 25th April 2008 "

jimbo26

I understand the problem Clio. What I did to overcome this problem is set up a separate bank account just for my DD's. On pay day I transfer enough money to cover the months DD's to the second account. I doesn't matter then if it is taken a day or two early. This account just ticks along and gets topped up each month. I know then that the money in the first account is mine to spend. Works for me.

exel1966

clio wrote: »

Your monthly invoice has been raised and will be collected by Direct Debit on or around 25th April 2008 "

Pretty typical phraseology used by many companies. Maybe ? it should be made a little clearer perhaps ?

This is why it cannot be assumed that the DD will leave on or after after the 25th, but could well leave before in line with what has been agreed at commencement of the DD.

clio

Jimbo
thats what i do lol i have seperate account for anything to do with net ie: this DD and debit card
payments that way i protect my main account. they must class the 22/23 as being around the 25th...

clio

its hit n miss if they take it out earlier/later and i can see some peeps getting caught out, it saves me a £1 so i cannot complain.

skyrider007

My account is in credit and I have £1,000 interest-free overdraft. This may be why I love direct debits. : )

Chrysalis

simple

1 - with direct debit you lose the ability to pay when you want instead its paid on set dates.
2 - the penalty for a bounced deirect debit is high, eg. if you late paying on a credit card it now has a £12 fee, whilst the bounced direct debit not only has the same £12 fee (since the payment is still not paid) but also has a £35 fee at the bank where the direct debit is from.

The way I see it direct debits are good for people who never have cashflow problems with plenty of money in the bank and as such no risk of a direct debit not clearing, but bad for people who have very tight cashflows.

NickX

Chrysalis wrote: »

simple

1 - with direct debit you lose the ability to pay when you want instead its paid on set dates.
2 - the penalty for a bounced deirect debit is high, eg. if you late paying on a credit card it now has a £12 fee, whilst the bounced direct debit not only has the same £12 fee (since the payment is still not paid) but also has a £35 fee at the bank where the direct debit is from.

The way I see it direct debits are good for people who never have cashflow problems with plenty of money in the bank and as such no risk of a direct debit not clearing, but bad for people who have very tight cashflows.

I agree with this viewpoint.

The consequences of a bounced Direct Debit are worse than a late payment.

IMO Direct Debits should only be used if you know for sure that you will have the funds in your account at the correct time to make the payment. Otherwise, you may be better making manual payments.