Is direct debit always the best way to pay my bills?
There are a number of ways to pay bills, but many people will agree that by far the most convenient way is direct debit. Direct debit allows companies to bill you automatically from your bank account each month, saving you time and effort - and in many cases, money.
However, depending on what you`re paying for, direct debit might not always be your best option.
When is direct debit best?
Direct debit is ideal for regular outgoings that don`t change, or that change very little - for example, things like mortgage, insurance and car finance payments. In this situation, direct debit simply helps you manage your finances more effectively - you know exactly how much is coming out of your account each month, and there is no effort required on your part.
Of course, many services give you no option other than direct debit - in which case you don`t have a choice - but it still stands that this is often the best way to pay fixed bills.
The other advantage of this is that many companies offer discounts if you pay by direct debit - after all, it`s more convenient for them, too.
When should I consider paying in other ways?
For some services, it might make more sense to pay in other ways - for example, with a bank transfer, by cheque, or over the counter at a post office. These might require more effort from you, but in some cases doing this could save you a lot of potential problems.
One example is energy bills. Because energy bills can vary based on usage as well as changing prices, you could find yourself underpaying without realising unless you keep a close eye on your meter reading.
Paying for your energy by methods other than direct debit could turn out to be more expensive in the long run, but paying for your exact usage each month could give you peace of mind - you`ll know that you won`t have to `play catch-up` with arrears at a later date. So although the financial incentive might not be there, you could have more control over your money.
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