Should you use Direct Debit for everything?

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.