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At some point everyone has had to use a direct debit or standing order. From paying your rent to handling your electricity bill, you’ll definitely have heard of these terms.
In essence, both are forms of regular automatic payment. So it might be easy to confuse them.
However they are entirely separate payment types. We walk you through their key differences and explain which is better for what – from your monthly rent to your gym fees.
As ever, it depends! One major plus about direct debits is that lots of utility providers give you a discount for using them. So they could save you money.
Say goodbye to late fees too. After all, with direct debits the onus is on the company to sort the payment out.
What about standing orders? Well, they’re good in instances where you can’t use a direct debit – paying your landlord for instance. Or, if you want to regularly move money from your main account into a savings account, then a standing order is ideal.
Both share a potentially quite costly downside. If you fail to stay on top of your regular payments you could end up wasting money on services or products you don’t need anymore. Or even incur penalty fees if you don’t have enough money in your account to make the direct debit or standing order.
So you’ve worked out which type of payment is more suited to your needs. Whether you’re paying university fees or sorting out your gas bill.
Find out below how to actually go about setting up a direct direct or standing order.
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