Direct Debit is a convenient way to pay regular expenses. Because payments are made automatically by your bank you can’t possibly forget to pay crucial bills. But there’s more to DD payment than meets the eye. DDs can often save you money, but in other circumstances they can actually cost more. Here’s a quick common sense run-down of when to DD and when not to DD!

Many utilities companies – gas, electricity, water, landline telephone and so on - give a discount to customers who pay by Direct Debit. Sometimes it’s as high as 10%, well worth having. It saves them money on administration. It ensures they get paid regularly. And customers on DD are slightly less likely to defect to another supplier because it takes slightly more hassle to disentangle their finances. 

Many insurance companies let you pay by DD but watch out. Instead of giving you a discount a lot of insurers add a percentage of your premium on top. It’s billed as administration costs and pays for administrating your credit, which is usually provided by a third party. Sometime it’s quite a high percentage. This practice often makes paying for insurance by DD the most expensive option.  So make sure you check the paperwork carefully before deciding how to pay.

As a general rule, it’s best not to assume DD is the lowest cost option. Always check first before signing up. If a company doesn’t appear to offer a DD discount, it doesn’t hurt to ask for one – they can only say no.

Best of all, we have an excellent range of utilities discount codes to help you save even more on all that boring stuff you need but resent paying for!  There’s British Gas, Eon, Scottish Power and more.