9.2 Paying your credit card by Direct Debit

• No need to send or organise payment month by month
• Bank account details and credit card needed for initial setup

A Direct Debit is an instruction given by a customer to their bank or building society which allows an organisation to collect varying amounts from their bank account, as long as the customer has been given sufficient warning of the collection dates and amounts.

Paying by Direct Debit is probably the easiest way to manage your credit card payments because, once the order is set up, you don’t really need to do anything.

To set up a Direct Debit for your credit card payments you need to contact your credit card company’s customer services.

The customer services representative will ask you for the sort code and account number for the bank account that the payments will be taken from. You can find these on your bank account statements.

You will then be asked how much you want to pay each month. You can choose to pay the minimum repayment, pay off the credit card balance in full each month or pay any other amount you choose, so long as it is more than the minimum repayment.

Once the Direct Debit is set up, you will need to make sure the amount due to be collected is in your account by the collection date. If it isn’t, the Direct Debit will bounce and the credit card company will most likely charge you a penalty fee of £12.

If your circumstances change, and you decide you want to pay more or less of your credit card bill each month, you can call up again and change the payment amount. However, you will need to do this two or three weeks before the payment is due to be collected because the organisation will likely request the removal of the amount a week or so before they will actually collect it. Once this request is made, the Direct Debit cannot be stopped and will come out on the collection date. The same applies if you wish to change the bank account your payment is collected from.

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