When it comes to your regular bills – like your phone, internet or utility bills – it’s easier to keep track of these when you pay them by Direct Debit. It means you don’t have to remember to pay them manually, so you’re less likely to forget an important payment. Not all accounts will let you set up Direct Debits though, if you’ve had problems with your credit history and you’ve got a Post Office Card Account, for example.
It’s not just budgeting that can be trickier if you don’t pay by Direct Debit either. Some bills might even be more expensive if you don’t pay them by Direct Debit, so find out how you can avoid getting stung by extra charges.
According to research by Which?, customers who don’t pay their regular bills by Direct Debit could be charged up to £243 extra for paying their bills manually. For example, if you pay your Virgin Media bill by cheque or manual transfer, this could cost you up to £60 a year extra and Scottish Power customers could save £95 by paying their bills by Direct Debit.
Quite often, companies won’t charge you extra if you pay your bills manually but they do offer a discount for paying by Direct Debit. The reason for this difference in what you pay is to cover the extra admin costs that come with manually paid bills, so the bills can cost more.
However, the Government has previously urged companies to limit the amount that they charge extra for customers who pay their bills by cheque or cash. This is because customers who pay bills manually are usually the most vulnerable, so they’re unlikely to be able to cope with the extra cost.
Managing the bills
If you find it hard to manage your regular bills but your account won’t let you pay by Direct Debit, you could consider switching to a thinkmoney Personal Account. It’s a clever alternative to a basic bank account that makes paying bills easy, as all of the money needed for your important financial commitments (that you tell us about) is kept to one side, meaning that they should always be paid.
When your wages or benefits are paid into your account, the money needed for any upcoming regular bills that you’ve set up with us will be automatically moved into your Salaries account, meaning you won’t be able to spend it. The leftover money is then transferred to your Card account, where you’ll be free to spend it safe in the knowledge that all of the important things have already been taken care of.
There aren’t any extra charges for day-to-day UK use with the thinkmoney Personal Account: there are no fees for going overdrawn or missed payments. There’s just one monthly management fee of £17.50 for a single account and £24.50 for a joint account, and you can find out more about this here.