What are your best Debt Hacks?


#21

You should always put a Disclaimer after this sort of advice to make people aware they will be responsible for breaking rules in some cases laws and also they might want to ignore the credit history etc… :stuck_out_tongue_winking_eye:


(Andre Borie) #22

You should always put a Disclaimer after this sort of advice to make people aware they will be responsible for breaking rules in some cases laws

Well in this case I assume you can’t afford to pay all your bills in the month so you’d be in the same situation anyway. But at least my advice gives you control over what bills you choose not to pay so you can for example pay your mortgage rather than having the gym subscription come first and the mortgage payment bouncing because your balance is now too low.


(Jonathon) #23

The best thing I ever did was stop paying by direct debit and pay manually.

For one thing, it avoided any charges as actually surprisingly if you are a week or so late paying a lot of things (if you HAD to for whatever reason) then companies don’t really mind and let you. Miss a direct debit and (normally) you’re hit with a charge from your bank.

Secondly it actually made you constantly think of your finances, and how much you were spending. Paying my phone bill via card each month made me look at my bill before paying, and query any charges before I paid.

Thirdly I still do it now and manage to get a fair amount of air miles by paying them via Amex :stuck_out_tongue:


(Andre Borie) #24

if you are a week or so late paying a lot of things (if you HAD to for whatever reason) then companies don’t really mind and let you

Getting in touch with them first (even if actually it’s on the same day) and letting them know about your situation always worked perfectly in my case. The default fees are just an automated thing which you get if you pay via Direct Debit (surprisingly, I actually had an issue with a Capital One direct debit that I claimed back since I already paid via Faster Payments and it was reflected on my balance, and was still hit with a default fee; thankfully refunded once I got in touch with them).

and query any charges before I paid

This is exactly why nasty companies love direct debits, because people can’t be bothered to question them and don’t really notice how much they’re paying (Monzo does help with this though).


(Jonathon) #25

I’ve never had issues with Capital One until this month and this was quite annoying haha.

With direct debit I once didn’t have the funds as I was being paid a week later after starting a new job. Called EE and they said not to worry as you get 7 days anyway extra before they do anything. So I cancelled my direct debit and never went back to it.

Had I had my direct debit fail, then it would have caused issues and I would have had a £12 charge for the pleasure.

Direct debit works for the companies, not for the consumer (mostly). This “ease” of payment is actually “ease” of taking your money directly, but marketed as something you can set up and forget about - the worst thing you can do with your own money.


(Andre Borie) #26

Direct debit works for the companies

It may seem like it does but actually it doesn’t really. A lot of money is spent on collecting debt, something that you wouldn’t need to do if you instead used a payment method like cards which give you instant approval/decline (so the customer can’t actually owe you money - worst case scenario their card declines and you don’t provide them service, instead of trying to collect the debt later on).


(Jonathon) #27

Hmm. Maybe. I still think it’s more in the companies favour generally. They have access to your bank with only a few day’s notice of how much they are taking and with (previously) little you could do to stop them.

I don’t know how many direct debits in general fail, but I would guess any costs involved in chasing debts from failed payments outweigh the potential of people just not paying at all or forgetting to if it didn’t exist.

There must be a reason why companies push direct debit (and many charge you extra if you don’t).


(Andre Borie) #28

They get the same access with a card though, with the added benefit of being able to take money before even providing any service (so bad payers are discarded instantly).

If anything, the chargeback policy is better than the DD one; in the former they can defend themselves if they provide evidence they did offer the service/goods paid for; in the latter case the payer can claim back any payments using the Direct Debit Guarantee without any justification, and the company is now on the hook to try and collect that debt.

I imagine in a lot of cases it’s simply because legacy companies already integrated with Direct Debit and don’t want to change. But I pretty much never see any new online service choosing DD instead of cards. Apple won’t allow me to pay for iCloud using DD. Netflix and Spotify don’t either.


(Jonathon) #29

Oh I see what you mean. I wasn’t meaning when they have your card details on file and can charge directly.

So yes, I would agree with you there.

I couple that with direct debits - basically any way that a company can take your money directly without you physically paying it manually yourself.


(Micky) #30

I can’t think of anything worse than spending my free time accessing provider websites or telephone customer service to make manual payments every month


(Andre Borie) #31

I do it every month. Takes less than 5 minutes (password manager auto fills everything for me). Services which allow you to pay via FPS (credit cards?) can also be done directly from the Monzo app and it even remembers your payment reference.


(Jonathon) #32

I have a handful - my phone bill, my gym bill, and my credit card bills (I have two).

But previously it was more because I had more debts. It was a pain - but that was the point I’m trying to make - having the pain makes you never forget how much you’re spending and how much debt you have.

Plus now I can actually benefit from the manual payment. I pay about £100 a month to EE via my Amex (and then just immediately put £100 onto my Amex) and that then gives me air miles and gets me closer to a companion voucher. Once you sort yourself out you can benefit if you’re careful.


(Andre Borie) #33

I guess if it takes too much time to pay everything then maybe there’s a problem there, you’re paying for too much stuff!


(Micky) #34

I think I’ve got 12 DDs on my account, that’s probably the issue. EDIT - Just checked Monzo, I’ve got 22 :confused:


(Andre Borie) #35

If you don’t mind saying, what are they?

I only have one which is a gym subscription; not too bothered about it as it’s always the same day & amount and I can let it decline without consequences.


(Jonathon) #36

Wow.

I can’t think of how I’d ever have 22 direct debits!


(Micky) #37

Mainly utilities, mobiles and insurances. Its a joint account so there is some of my wife’s things on there as well


(Andre Borie) #38

Maybe they are leftovers from cancelled services. A friend of mine recently CASS’d to Monzo and it pulled 3 direct debits from old O2 contracts - seems like they don’t bother cancelling mandates when the plan is cancelled.


(Jonathon) #39

O2 are the worst for number of direct debits. I love their way of billing on O2 refresh and will go to them when I can, but they have a different direct debit for the phone plan and the airtime plan.

My mate has 2 phones and an iPad with O2, and has 6 direct debits for them! :joy:


(Andre Borie) #40

They should separate it properly between a credit agreement for the phone and the network plan. Sadly they’ve screwed it up (what a surprise!) and give you the worst of both worlds where you get separate DDs but at the same time you can’t cancel one and keep paying the other (you should be allowed to cancel the network plan if it doesn’t work out for you but still keep paying the phone credit agreement).