How to set up direct debits on your credit card
Never miss a bill and manage your ongoing expenses by setting up direct debits from your credit card.
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Direct debits can make it easier to stay on top of your regular expenses. This might include your gym membership, streaming subscriptions and utility bills. Not only is it easier than manually paying your bills each month, but it'll help you make your payments on time. You can set up direct debits for fixed amounts or a variable amount, where the merchant will deduct the exact amount owing from your account.
Use this guide to learn how to set up direct debits from your credit card account.
How to set up a regular payment on your credit card
The exact process will vary depending on your credit card issuer, but you can usually set up direct debits from your credit card by contacting your provider or merchant (such as your telco provider) on the phone. When you're setting up or managing your account online, you may also be able to list your credit card details as your preferred payment option. Your payments will then automatically be deducted from your account when your bill is due.
What to consider when setting up a direct debit
Before you set up a direct debit from your credit card, ask yourself the following questions:
- Can you trust the provider that you're sending the direct debit to? Only set up direct debits from your credit card or debit card with services and providers that you can trust.
- Do you know how to cancel the direct debit? Make sure you know the steps you'll need to take to cancel the direct debit if you decide you don't need it or want to close the credit card.
- Can you repay the transaction made on your credit card? There's no point setting up a direct debit from your credit card unless you can afford to pay off the transaction in full each month. Otherwise, any unpaid amount will attract interest and you'll end up paying more than you need to.
Make sure to check your bank statements
When you set up a direct debit, it's easy to forget about the payment as it's deducted from your account. To make sure you're being billed correctly and that the payments are being deducted on time, check your credit card statement regularly. When you're checking your statement, you may identify direct debits for services that you're no longer using (such as an old gym membership or tv streaming subscription service).
How to cancel a direct debit from your credit card
If you're closing your credit card, make sure to set up direct debits from another card to make sure you're still paying your bills on time. Depending on your service provider, you may be able to cancel your direct debit over the phone or by managing your payment option through your online account.
Otherwise, you may need to contact your financial institution to cancel the direct debit and ask that they confirm the cancellation in writing. If you're required to cancel it in writing, you can check out Finder's sample letter for cancelling a direct debit for a template that you can use.
Make sure to 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.
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