The Advantages Of Using A Direct Debit

Taking care of your finances can be a tricky business and it can be easy to forget

to pay a monthly payment on time, especially when you are busy with other things. This is where a direct debit can be particularly useful. But what is a direct debit and what does it do? In simple terms it is where you give a specific instruction to your bank. This instruction allows a company or organisation, one that you want to pay for a service provided, to withdraw the specific funds required from your account. With a direct debit you are notified in advance of the amounts that will be withdrawn and the date that the money will be deducted from your account. Once you have agreed to the date and amount, the money can be automatically deducted.

Using a direct debit can be particularly useful in a number of ways. It can be very helpful for when you have a recurring payment to make. A direct debit can be set up on a weekly, monthly or yearly basis. This means that you do not have to remember when all your different payments are due. You can set a direct debit up to be withdrawn from your account on a specific day every month. This is a huge advantage as you will no longer have to keep track of when money needs to be paid.

A direct debit can also save you time. Instead of having to go through the payment process every month that a particular payment is due, with a direct debit the payment is already set up and will go automatically. This will save time and stress for you as you no longer have to worry about going to the bank to make a payment or filling out cheques. You can rest easy that your payment will not get lost in the post or that you will run out of time to send your payment.

You may be eligible for a discount if you use a direct debit instead of another type of payment. Many companies and businesses find direct debits particularly useful. This is usually because the use of a direct debit means that they have an exact date that they can expect payment. In addition, many businesses find that their administration can be carried out much quicker and more efficiently. A number of organisations will offer a discount for paying by direct debit. For example many water and utility providers offer discounts, as do many local authorities and the TV licensing organisation.

A direct debit can also be a secure way of paying bills and payments. A direct debit will come with a guarantee that will protect you and your finances should anything go wrong. Most guarantees will cover the same things. If there is an error and money is taken out that should not have been deducted, many banks will have an immediate money back guarantee. The guarantees for direct debit will also ensure that you are given notice in advance about the date the money will be deducted and how much will be taken. A guarantee will also protect your right to cancel a direct debit at any time. Direct debits are also closely monitored by the banks; all the organisations that use the direct debit scheme have to pass a vetting process before they can do so.

You can sign up to a direct debit in a number of ways, such as over the phone, online or by a paper form. It is a hugely useful method of making payments that can take out the stress of remembering when all your payments have to be paid. It is secure and less time consuming than sorting out your payments by hand. Using this method can even save you money in some cases. The discount you get may only be fairly small on a monthly basis but over a year can save you a substantial amount. It is also a payment method that many organisations and businesses prefer. Direct debits can be useful for any number of payments ranging from monthly household utility bills to annual insurance payments for your car or home.

by: Izzy Evans

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