When should I pay my Direct Debit

johngc

I did a quick search and could not find the answer to this, but I was wondering what peoples views are on the best day to pay Direct Debits?

I currently have them setup to be paid on pay day, and the 1st of the month and a few that are all over the place.

I am, unfortunatley, overdrawn and was wondering if I changed all payments to the day before pay day, would it benefit me?

The thought process is going along the lines that I will be in credit (or less debt!) for a lot more of the month and so any OD fees / interest would be less.

skyrider007

How about three working days after your pay day? Also, have you thought about arranging an agreed overdraft? Some bank offer this interest-free, so long as you have money regularly going into your account.

~Beanie~

If they were all debited the day before pay day, wouldn't the Bank just bounce them as you would have no money in your account

olly300

You want to pay your direct debits 3 to 5 working days after you get paid. That way if your pay gets mucked up (it does happen) then you have a period of grace to sort it out with your either employer or bank.

YorkshireBoy

johngc wrote: »

The thought process is going along the lines that I will be in credit (or less debt!) for a lot more of the month and so any OD fees / interest would be less.

For utility bills, council tax, and other non-interest bearing 'debts', it's a good idea if paying them just after you get paid means you use your overdraft every month.

However, are you disciplined enough to earmark the money or will you spend it on other things?

For interest bearing debt, ie credit cards, then the sooner you pay the less interest is charged. Weigh up which is cheaper...overdraft EAR or credit card APR.

Once you return to in-credit banking, then you'll probably find that paying your bills 3-5 days after your monthly salary hits is the best way. You then know that what's left is your own.

Good luck.

johngc

Thanks for the suggestions but I probably worded it a bit wrong.

I have a £5k overdraft facility and every month my pay and my wifes goes into this account. This means that we go into a bit of credit and then back down to debit each month. We do not go to rock bottom so there is a bit of flexibility.

My thinking was, say we get paid £3k which takes us to £1k credit. If all payments go out on 15th (pay day) and they totalled £2k then we would be £1k overdrawn on pay day all month and get charged interest for the privilege. If however we had all the DD's go out on the 14th, we would stay £1k credit, till the 14th, drop to £1k overdrawn for a day and then go straight back to credit the day after, and this time £2k :T.

Its a basic example but by my calculations our income does exceed our outgoing each month so we would be heading the right way regardless.

CLAPTON

if your suppliers are willing to push back the DD date then that will be a bit of help; if they want to bring it forward then you will lose out.

better to review your spending habits and stop living beyond your means and work out a programme to clear the overdraft permanently