Simply put, a Direct Debit is a request to your bank or building society from you. It authorizes the organization to receive different sums from your account – but only if you have been given advance notice of the amounts and dates of collection. Once you’ve settled on those, the money is automatically deducted.
In a nutshell, the Direct Debit System is the simplest and most convenient way for you to pay regular and occasional bills. It means you don’t have to worry about missing those required payments, especially on holiday, at busy times of the year, or doing anything more enjoyable than thinking about bills!
The advantages of using Direct Debit to pay your household or company bills are the same. This refers to the Direct Debit Guarantee, which provides you with the peace of mind that you will be entitled to a full refund if there is a mistake in payment of a Direct Debit. Here are six benefits of using Direct Debit:
- Spreads the Cost
Paying your daily bills or company outgoings by Direct Debit helps you to spread expenses over a time agreed upon with the organization you are paying.
Many organizations have various flexible payment dates, allowing you to plan your bills conveniently. Inquire with the organization to which you are paying what choices are available.
Direct Debit payments are guaranteed. As a result, you are immediately secured by three critical safeguards:
- Advance notice if the date or amount changes.
- The right to cancel any time.
- Suppose there was a mistake in the Direct Debit payment, your bank or building society will have an instant money-back guarantee (It is important to note that the Guarantee applies to Direct Debit payments. It cannot be used to resolve contractual disagreements between you and the billing organization).
Businesses find Direct Debit just as convenient and efficient as consumers. For this reason, many offer discounts in return if you pay by Direct Debit. Discounts vary, but overall Direct Debit savings can add up to a substantial amount each year. It pays to check when you get a bill to see how much you can save.
- Peace of Mind
Direct Debit is one of the safest and easy ways to pay your bills because:
- Payments are made automatically, meaning payments are never forgotten, lost in the mail, or delayed due to postal issues, and there is no chance of late payment fees.
- Organizations that use the Direct Debit Scheme must go through a rigorous vetting process and are closely supervised by the banking industry.
- The Direct Debit Guarantee covers you and your money in the unlikely event that a Direct Debit payment mistake occurs, such as when a payment is collected on the incorrect date or with an incorrect amount. All participating banks and building societies support it.
Modern life is hectic – but Direct Debit helps. It takes away much of the hassle associated with paying bills, and thus you can spend more time doing the things you want. You’ll find it easier to stay on top of your accounts, and you’ll know exactly how much money is going out each month. Paying by Direct Debit also reduces the workload and paperwork for the finance department. It is a win-win situation.
Switching to the Direct Debit System eliminates the need to pay each month. Any upcoming payments will be alerted to you, and you can cancel them at any time. Furthermore, because of the Direct Debit Guarantee, this is the most secure method of payment.