Setting up direct debits makes it easier to stay on top of your regular bills. Whether it's your gym membership, streaming subscription or energy and phone bills, automating the process is easier than manually paying your bill every month.
With credit card direct debits, you:
You can set up credit card direct debits for fixed amounts or to cover the exact amount you owe, even if it changes from bill to bill.
How you set it up will depend on your service provider. Some service providers will need you to fill out a form, while others may allow you to do it through their website or over the phone.
The details you'll have to provide include your credit card number, card expiry date and card verification number.
When you set up a direct debit, it's easy to forget about the payment because it automatically comes out of your account. But its worth checking your credit card statement regularly so you know you're being billed correctly. As a bonus, it could help you find direct debits for services that you're no longer using (such as an old gym membership or TV streaming subscription service).
If you're closing your credit card, make sure you update your direct debit details to avoid any issues. Depending on your service provider, you may be able to cancel your direct debit over the phone or manage your payment options online.
Otherwise, you may need to contact your financial institution to cancel the direct debit and ask that it confirms the cancellation in writing.
Make sure you check your bank statement to confirm that the direct debits have been cancelled. If the recurring payments continue, follow up with your card issuer and the merchant to resolve the issue.
Each company that bills you will have different conditions for direct debits. Switching these payments to a new card is a DIY affair. You can keep the process simple by following these steps:
| Response | Male | Female |
|---|---|---|
| All of the balance | 7.71% | 6.55% |
| The majority (more than 50%) of the balance | 3.57% | 1.9% |
| About half of the balance | 1.69% | 1.03% |
| Less than half of the balance | 1.13% | 0.34% |
| I only pay off my minimum repayment | 0.75% |
Images: Getty
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Hi! 3yrs back I set-up a direct debit for a service. Though I attended the service, I was never really happy with the service and don’t really want to pay for it. The company also stopped contacting me regards to this matter.
Even though, the company is a 1 person operated (pretty small) and also because I don’t wish to pay for it. Can they still affect me in any negative ways?
John.
Hi John,
Thanks for your question.
All your credit applications, payment defaults, credit enquiries, payment histories and even bankruptcy information are all listed on your credit file. So, if you have not paid your debts for whatsoever reason, they will be recorded on that file and that may have a negative effect on your rating.
Usually, when you apply for any form of credit, the creditor will conduct an inquiry of your file. Whatever information they find from your file will most likely be considered in their decision whether to approve your application or not.
If you wish to check your credit file, you have the option of signing up for a credit monitoring service or buying a one-off credit report.
Cheers,
May
Are direct debits on credit cards considered purchases or cash advances for the purpose of interest charges?
Hi Lourie, thanks for your inquiry!
Generally direct debits are associated with bill payments and recurring cash advance transactions. The quickest method to determine whether your direct debit transaction is a purchase is to contact the merchant directly.
Cheers,
Jonathan
I would like to set up a direct debit for a credit card as we will have a large amount of spending for the next six months but these payments may put us into credit on the card. Is this allowed?
Hi Trevhse,
Thanks for your inquiry,
Direct debit payments via a credit card are possible if the merchant supports direct debit facility. Depending on the credit card lender the interest rate will vary for the direct debit transaction.
I hope this helps,
Jonathan
I have been on the phone and have spoke to 8 different people from St George this week regarding the interest charges on my vertigo mastercard. Every single one of them said that I will be paying interest if I have not paid the closing balance. This is not what I was told when signing up for the card, and it is not what is stipulated on your website. I always make the minimum payment, going over it by about $300 per fortnight. I don’t know if the interest charges are from my gym membership which has been coming out of the credit card. I was never warned about this type of transaction and the fees that it would accrue.
Furthermore, I have not received any phone calls from St George to say what the charges are from, which I would expect if it is a $22 membership, which I get charged $27 extra for. Not one of the customer service representatives could give me helpful information. I have their names, and I know which departments they work in if this is of any help.
What should I do?
Hi Kate,
Thanks for your question.
Interest will be applied on your St.George Vertigo card unless you pay the closing balance in full each statement period. If you’re unsure which transactions are costing you interest, it can help to take a look at your most recent statement and see the interest charges that are applied to your account. Any purchases you make will have the purchase rate of interest applied, while cash advances (which St.George defines as withdrawing cash using your card or transferring to and from other accounts you have with St.George) will have the cash advance rate applied.
As for the $27 additional charge, this is something that you will need to sort out with St.George. You might want to take a look at the details of the process of resolving disputes with your card issuer.
I hope this has helped.
Thanks,
Elizabeth
Hi, I have just switched bank accounts which seemed to go ok …until now. I received a default letter from my credit card saying I was in arrears and missed my payment. When I called they said I cancelled it on a given date and advised me to contact my bank, which I did and they say the switch was ok and the direct debit is showing as live on their system. Who is at fault to reclaim costs from and how do I prove this as I have made several phone calls and they both say it isn’t their fault. Surely I must be able to get proof somewhere, after looking at my bank account it does show as active on the screen ???? Confused! Please help or advice :)
Hi Jjaymags,
Thanks for your question.
You might want to call your credit card issuer to confirm what the problem is. If you’ve set up direct debit with your credit card, it could be that the numbers on the form were incorrect.
Your credit card issuer should be able to provide a course of action; alternatively you could contact the Financial Services Ombudsman as both banks seem like they are unable to help.
Cheers,
Shirley