Not everything. For some kinds of payment, Direct Debit might not be the best option.
Paying by Direct Debit for some things can be a bad move. Here’s when you should avoid Direct Debit:
- Insurance. When you pay for insurance each month, instead of all at once, you’re usually charged interest (an extra amount on top of the actual cost). That can add up fast!
- Buying your phone. Buy it in one payment and you could save money.
- Amazon Prime. Like with some phones, it’s cheaper to pay all at once if you can afford it. This will save you £16.88 each year.
- Car and vehicle tax. Pay for the full year for the cheapest price. There’s a 5% surcharge if you pay in monthly or 6-monthly instalments. However you can still set up a Direct Debit for a 12-month payment to make sure you don’t forget. All the different costs are here.
- Travel and sport season tickets. You may be able to save money by paying up front for your train or stadium seat.