Cancelling a direct debit from your credit card isn't complicated, but there are some factors you should consider before you go ahead.
Setting up a direct debit from your credit card can be a convenient way to keep on top of ongoing everyday payments such as phone bills or internet streaming subscriptions. However, if you'd rather have more control over how and when your payments are made, cancelling a direct debit isn't a complicated process. In this guide, we've highlighted some of the major reasons you might need to cancel a direct debit payment, the steps you can follow to do this and some factors you might want to consider before cancelling any direct debits.
Why would I need to cancel a direct debit payment?
Direct debits can simplify how you make payments, but there are instances when you might want to put a stop to one or more direct debits. Some of the most common reasons to stop direct debits include the following:
- Change in income. There is a change in your income and you want more control over how you handle your expenses.
- Cancel a subscription. You want to cancel a subscription, for example, to a magazine, charity, online streaming service or gym membership.
- Moved house. You’ve moved to a new area and you want to stop direct debits to previous utility providers.
- Cancel a service you no longer want. You want to cancel a direct debit you signed up for in haste or unwittingly.
How do I cancel my direct debit payment?
The Australian Code of Banking Practice states that banks should take prompt action in processing direct debit cancellation requests, and the Mutual Code of Banking Practice has a similar stipulation in place for credit unions and mutual building societies. The steps to cancel a direct debit from a bank account and a credit card vary slightly, and to cancel an existing direct debit from your credit card, follow these simple steps:
- Call, message or write a letter to the merchant who has the direct debit authority asking it to cancel the arrangement.
- Contact your provider and inform them of the change or send a copy of this letter your credit card issuer.
- Check with the financial institution in a few days to establish if it has cancelled the direct debit.
How to write a letter to cancel a direct debit payment
If you decide to write a letter or email to cancel your direct debit payment, you'll need to include the information of the direct debit and the account you're referring to.
Bear in mind that cancelling a direct debit in the middle of a contract term can come with repercussions, so it’s best that you get legal advice in such a situation.
The letter given below should work only as a guide, and remember that you might have to make changes to suit your particular situation.
Sample letter for cancelling a direct debit on your credit card
To:
The Manager
[Name of credit card provider][Name of branch][Address]Account name: [XXXXXXXXXX ]
Credit Card Account No: [XXXXXXXXXXX]
Dear Manager,
RE: CANCELLATION OF DIRECT DEBIT
I request that you cancel a direct debit authority previously granted by me to [name of the merchant] with immediate effect.
Find enclosed a copy of the letter I sent to [name of the merchant] instructing it of the same.
Yours faithfully,
[Signature][Name]When and what can I expect from the response?
Your credit card provider cannot legally refuse to honour your request for a direct debit cancellation. If your card provider refuses to cancel a direct debit, simply inform the representative you’re dealing with that clause 19.1 of the Code of Banking Practice requires the institution to, not just honour your request, but do it promptly. If your credit card provider does not cancel the direct debit, and if it makes further payments through the same direct debit, you can request for a reversal of funds. If you face problems at any stage, you can file a complaint with the institution’s internal dispute resolution team, and if this does not help you can move to the Credit Ombudsman Service or get advice from Consumer Action's public line.
What else should I be wary of when cancelling direct debits?
Cancelling a direct debit linked to your credit card is not particularly difficult, but there are some conditions to remember before you go ahead:
- Breach of contract. If the direct debit you wish to cancel comes linked to a product or service you’ve purchased in the past, and you’ve to keep making payments for a given time period, cancelling such a direct debit can lead to a breach of contract. You'll need to make sure you continue to make payments manually to avoid any legal consequences.
- Implementation of instructions. You instructing your credit card provider to cancel a direct debit is one thing, and it implementing your request is another. As a result, make sure you go through your credit card statements carefully and check if the debits in questions have stopped.
- Time limitations on chargebacks. If your credit card provider doesn't cancel a direct debit, contact it as soon as possible for a chargeback. This is because card providers have different time limits in place when it comes to processing chargebacks. Use our guide to understand how credit card charge backs work.
Cancelling a direct debit from a bank account or a credit card is not difficult. You still have to contact your credit card provider and instruct it to cancel the direct debit in question. Whether you do this over the phone or in writing, make sure you keep an eye on your account to ensure that your bank did indeed cancel the direct debit.
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I tried to cancel a credit card recurring payment.
However my bank pointed out that clause 19.1 of the 2013 code isn’t to do with credit cards or direct debits. They also pointed out that credit card recurring payments (as opposed to direct debits, which are direct from bank accounts) doesn’t have an unconditional cancelling clause.
Therefore since I had originally agreed to the recurring payment, and even though in the meantime my credit card had expired and a new one was issued, and I hadn’t provided the merchant with the new expiry date, they refused to cancel the credit card recurring payment. They said I had to get the merchant to cancel it.
Therefore how do I cancel this recurring payment?
Hi Jussy,
Thanks for getting in touch with finder. I hope all is well with you. :)
There’s a slight difference between the process of canceling a direct debit from a bank account and a credit card. In your case, the first step you need to take is to get in touch with the concerned merchant. A call, email, or letter should be sufficient to notify your merchant. Ask them formally to cancel your credit card payment arrangement.
After doing so, you can now contact your bank and send them a copy of the agreement you just made with the merchant. After a few days, you may then check with your provider if they indeed cancelled the direct debit.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
I want to cancel direct debit from my personal which is linked to credit card account…. How do I go doing this? As every time I reach the support team on call they are not able to help me…. Plz provide with the solution
Hello Syed,
Thank you for your comment.
The steps you can see above are for cancelation of debit card linked to a credit card. You must contact your credit card provider and instruct it to cancel the direct debit in question. You can check with your provider’s website contact us page to contact them or call them on the contact numbers displayed.
Regards,
Jhezelyn
i want to know that how can i write a letter for cancel debit card
Hi Dinesh,
Thanks for your question.
As your debit card gives you access to your transaction account, you can just write a basic letter informing the bank of your name, account number and account information and the date you want your debit card cancelled. If you would also like to cancel your transaction account you can see this page.
I hope this has helped.
Thanks,
Elizabeth
How must I write the letter to inform my insurance provider not to debit my account for six months, but not to be cancelled due to my contract ending as a temporary employee?
Hi Kgauhelo. Thanks for your question. You may need to wait until the time you wish to cancel the direct debit, as the insurance provider may not be able to arrange a future cancellation of direct debit. The best thing to do is to give them a call and find out what their policy is. Otherwise, please use the example on this page to draft a letter to your provider. Jacob.