COMMENT
Get Discounts With Direct Debit

I was rather surprised to find out this week that less than half of gas and electricity consumers use direct debit to pay their bills. Surprised because it wouldn't be my idea of fun to have to write out a cheque or queue up at the bank to pay my utility bills every month or so.

But according to BACS, the payment processing service, significant numbers of people prefer alternative methods of payment for household bills including telephone, satellite, car breakdown and health insurance in spite of the fact that direct debits often mean discounts.

BACS say that bill payers could save up to £187 a year if they used direct debit to pay for these charges. The biggest savings to be made are on gas and electricity bills – with the maximum discount available for gas coming to £65, closely followed by electricity where the discount could save you as much as £40.

So why don't more people use direct debits? The answer may come from the gas and electricity watchdog, Energywatch, who say billing continues to be the largest source of consumer complaints to their organisation. It accounts for 61.5% of all domestic complaints, equivalent to nearly 39,000 complaints each year.

Since a direct debit authorises an organisation to collect varying amounts from a customer's bank account at agreed dates throughout the year, it's not surprising people are unwilling to had over that authority to companies who can't calculate their bills properly.

However, that's a criticism of the utility companies not of the direct debit system itself. Paying by direct debit helps to spread the cost of bills, avoids missing payments and saves time. And if payments are taken in error, we're entitled to an immediate refund from the bank.

I can honestly say I've never had a problem with a direct debit payment going wrong. I like knowing I'm getting a discount and it beats writing cheques or joining the queues at the bank any day.

Find out more about Why Direct Debits Are Better Than Cheques.