Direct Debit, Direct Debit, Direct Debit.....

KeyserSoze

WHY, WHY, WHY????

I'm going to get straight to the point on this one. I've been living overseas for the last 6 years and recently returned to Ireland permanently..... I hope!!!

While living abroad there was so many flexible ways to pay for power bills, internet, phone, mobile, gas, day care, etc..... My preference was to pay for all these bills by credit card. Why??, I hear you ask.... "Interest on credit cards is massive..."

Well, here’s the thing. Interest on credit cards is indeed huge.... But only if you don't clear your monthly balance. If you clear your monthly balance every month, guess how much interest you pay..... ZERO %. And while I pay for everything in credit, my hard earned cash was sitting in a high interest savings account, where it remained untouched, gathering a nice little sum of interest. Come the end of the month, the credit card bill arrives, my cash has by now earned its interest and I simply clear the credit card.... Voilà. Effectively giving me a discount on all my bills.... Not to mention payment protection in case a utility provider messes up your bill.

And another thing, I was rewarded by my bank for using their credit card. Each time I used the card I built up points which I can cash in at any time for real cash..... I let the points build up throughout the year, cashed the points in at Christmas.... And yes, guess what.... Christmas was paid for.... by my bank!

Back in Ireland, here is my experience:

• Electricity Payment: Direct Debit
• Gas Payment: Direct Debit
• Internet Payment: Direct Debit
• TV Payment: Direct Debit
• Phone Payment: Direct Debit
• Mobile Payment: Direct Debit
• Day Care Payment: Direct Debit
• Gym Payment: Direct Debit

And these are just the ones I can think off.... This is 8 providers dipping into my bank account anytime they want. Into a current account no less!!!! Where you earn no interest. I like to keep as much as I can in my savings accounts to gain interest and move funds into my current account for day to day stuff.
Now I have to manage 8 different payment dates to 8 different providers and make sure there is enough funds in the current account to cover all of this.

I'm nearly finished here.... I just have some questions.

Why do businesses not offer standing orders on credit cards?
Why do we have to pay out cash all the time?
Why do banks not offer decent incentives for using their credit card facilities?

I already know the answers to these questions, I would just like to see other people’s comments and answers.

L1011

Credit cards charge a percentage, debit cards a flat fee. This was infuriating when reward credit cards existed.

finglashoop

KeyserSoze wrote: »

WHY, WHY, WHY????

I'm going to get straight to the point on this one. I've been living overseas for the last 6 years and recently returned to Ireland permanently..... I hope!!!

While living abroad there was so many flexible ways to pay for power bills, internet, phone, mobile, gas, day care, etc..... My preference was to pay for all these bills by credit card. Why??, I hear you ask.... "Interest on credit cards is massive..."

Well, here’s the thing. Interest on credit cards is indeed huge.... But only if you don't clear your monthly balance. If you clear your monthly balance every month, guess how much interest you pay..... ZERO %. And while I pay for everything in credit, my hard earned cash was sitting in a high interest savings account, where it remained untouched, gathering a nice little sum of interest. Come the end of the month, the credit card bill arrives, my cash has by now earned its interest and I simply clear the credit card.... Voilà. Effectively giving me a discount on all my bills.... Not to mention payment protection in case a utility provider messes up your bill.

And another thing, I was rewarded by my bank for using their credit card. Each time I used the card I built up points which I can cash in at any time for real cash..... I let the points build up throughout the year, cashed the points in at Christmas.... And yes, guess what.... Christmas was paid for.... by my bank!

Back in Ireland, here is my experience:

• Electricity Payment: Direct Debit
• Gas Payment: Direct Debit
• Internet Payment: Direct Debit
• TV Payment: Direct Debit
• Phone Payment: Direct Debit
• Mobile Payment: Direct Debit
• Day Care Payment: Direct Debit
• Gym Payment: Direct Debit

And these are just the ones I can think off.... This is 8 providers dipping into my bank account anytime they want. Into a current account no less!!!! Where you earn no interest. I like to keep as much as I can in my savings accounts to gain interest and move funds into my current account for day to day stuff.
Now I have to manage 8 different payment dates to 8 different providers and make sure there is enough funds in the current account to cover all of this.

I'm nearly finished here.... I just have some questions.

Why do businesses not offer standing orders on credit cards?
Why do we have to pay out cash all the time?
Why do banks not offer decent incentives for using their credit card facilities?

I already know the answers to these questions, I would just like to see other people’s comments and answers.

All off my DD have been cancelled except gas/ electricity.

I pay all other bill by standing order on a date of my choosing

Kristopherus

OP, talk to your (Irish) bank and instruct them to set up Standing Orders instead of DDs. They will try to talk you out of it but stand firm.

KeyserSoze

L1011 wrote:

Credit cards charge a percentage, debit cards a flat fee. This was infuriating when reward credit cards existed.

There is no payment protection for the customer when using DD or debit card. % fee costs is a business expense, not a concern of the consumer.

Why were reward cards infuriating?
Who were they infuriating for?

L1011

KeyserSoze wrote: »

There is no payment protection for the customer when using DD or debit card. % fee costs is a business expense, not a concern of the consumer.

Why were reward cards infuriating?
Who were they infuriating for?

Debit cards have the same protection as credit in Ireland. The higher percentage is why firms refused them.

It was the refusal of firms to accept credit card payments that was infuriating. There are no proper reward credit cards anymore.

Did you understand *any* of my post? It wasn't complicated.

VincePP

Where's the rip off.

jahalpin

Standing orders are for a set amount every time, this wouldn't be very much use for items like electricity, phone etc.

Most utility providers do not like standing orders as there is a lot more manual work needed to check that the payment has been received as opposed to direct debits where once the file has been sent to the bank it is assumed that the payment has been successful unless the bank specifically tells them otherwise

Most credit card companies have stopped providing rewards as the interchange fees have been reduced to almost zero so the money collected for processing the card would be less than the rewards would cost them

jahalpin

Kristopherus wrote: »

OP, talk to your (Irish) bank and instruct them to set up Standing Orders instead of DDs. They will try to talk you out of it but stand firm.

Most utility providers include a clause in the contract which insists on payment by direct debit so this won't work

Under SEPA, you have a lot of protection against unauthorised direct debits ie. 8 week "no questions asked" reversal of direct debits and up to 13 months reversal if you can provide a valid reason to the bank

KeyserSoze

L1011 wrote:

Did you understand *any* of my post? It wasn't complicated.

Obviously not. The second sentence of your first post was not very clear.

KeyserSoze

VincePP wrote:

Where's the rip off.

1. DD is the only option.
2. No discounts for "cash" payment.
3. Lack of rewards from banks for using their facilities.
4. Lost interest if you could pay via credit card.

I consider these lack of options as a rip off in comparison to payment and banking options in other countries.

VincePP

KeyserSoze wrote: »

1. DD is the only option.
2. No discounts for "cash" payment.
3. Lack of rewards from banks for using their facilities.
4. Lost interest if you could pay via credit card.

I consider these lack of options as a rip off in comparison to payment and banking options in other countries.

Discounts are given for dd, extra charge for cash payments because it costs extra to process

"rewards" ah come on. There is nothing free in life - you pay handsomely for "rewards"

Lost interest - you do know that interest rates on deposit accounts are at zero or 0.10%. So your €200 bill for an extra month interest @ 0.10% costs you less than 2c. The flip side is the supplier is charged about 0.7% for the credit card payment. And guess who pays for that? Yep, it would be built into your bill.

KeyserSoze

VincePP wrote:

Discounts are given for dd, extra charge for cash payments because it costs extra to process

VincePP wrote:

"rewards" ah come on. There is nothing free in life - you pay handsomely for "rewards"

VincePP wrote:

Lost interest - you do know that interest rates on deposit accounts are at zero or 0.10%. So your €200 bill for an extra month interest @ 0.10% costs you less than 2c. The flip side is the supplier is charged about 0.7% for the credit card payment. And guess who pays for that? Yep, it would be built into your bill.

Discounts:
In most cases DD is mandatory, discounts for DD are not really discounts. It's a lure to choose the preferred payment method for the providers. No other options are really given.

Rewards:
Absolutely.... I had a rewards credit card that cost me $90 per year to have. I used it for ALL payments where I could (99% of businesses accepted CC). I was rewarded for every dollar I spent on the card. These points built up over 12 months. I cashed them in at Christmas for $500 approx.... every year (Net $410). I was very disciplined with clearing the card every month as not to incur interest. Otherwise a few missed payments would cancel out the rewards. Banks make up for the rewards they pay out by relying on people missing payments and incurring high interest..... which unfortunately is most people.

Lost Interest:
My saving account pays 2% on the first €1000 and 0.15% thereafter.... every month. So €3000 in savings equals €23 per month, €276 per year. I know it's not huge.... but rather have it in my pocket.

I certainly understand and appreciate your point of view. The point I'm trying to make is that if you combine rewards credit cards, savings accounts and bill payments by CC's, consumers can benefit if they are disciplined with their personal finances.
But the lack of these options in Ireland see a lot of people strapped for cash until their next pay check... Which can be an unpleasant situation to be in.

ItHurtsWhenIP

KeyserSoze wrote: »

Rewards:
Absolutely.... I had a rewards credit card that cost me $90 per year to have. I used it for ALL payments where I could (99% of businesses accepted CC). I was rewarded for every dollar I spent on the card. These points built up over 12 months. I cashed them in at Christmas for $500 approx.... every year (Net $410). I was very disciplined with clearing the card every month as not to incur interest. Otherwise a few missed payments would cancel out the rewards. Banks make up for the rewards they pay out by relying on people missing payments and incurring high interest..... which unfortunately is most people.

I'm not sure if they still do it, but a certain state owned bank here, issued a Platinum card which gave cash back every month. I don't think there was a membership fee, but you had to spend €2,500 on it first and then thereafter for the rest of the year you got some few quid back. I used to have a LOT of travel expenses in a job I had, so I blew through the €2,500 in the first month. On a typical month a Card Balance of ~€3,000 gave me ~€15 back. Maybe not as generous as what you had, but it was better than nothing.

Kristopherus

KeyserSoze wrote: »

Rewards:
Absolutely.... I had a rewards credit card that cost me $90 per year to have. I used it for ALL payments where I could (99% of businesses accepted CC). I was rewarded for every dollar I spent on the card. These points built up over 12 months. I cashed them in at Christmas for $500 approx.... every year (Net $410). I was very disciplined with clearing the card every month as not to incur interest. Otherwise a few missed payments would cancel out the rewards. Banks make up for the rewards they pay out by relying on people missing payments and incurring high interest..... which unfortunately is most people.

I presume you cannot use the credit card from your homeland here?

Guy:Incognito

How much are you paying for your bills if the interest earned by holding on to the amount for a couple of weeks is even worth bothering about?

dobsdave

Lost Interest:
My saving account pays 2% on the first €1000 and 0.15% thereafter.... every month. So 3000 in savings equals €23 per month, €276 per year. I know it's not huge.... but rather have it in my pocket.



You were talking about the interest missed on your monthly bills, are your monthly bills really 3000?

The tesco credit card gives you points for every purchase.
bord gais allow you to pay by credit card.
They will also give double your tesco points off your bill.

the groutch

the reason for so many utilities insisting on DD is the amount of scumbags who will leave a rental property without any notice, and leave a big bill accruing that the landlord rightfully wants nothing to do with and will leave the utility company out of pocket.

KeyserSoze

Kristopherus wrote:

I presume you cannot use the credit card from your homeland here?

I can, but it incurs an additional 1.5% per transaction when used outside the country of issue. Not really worth while. I think the international transactions charge is fairly typical.

VincePP

KeyserSoze wrote: »

Lost Interest:
My saving account pays 2% on the first €1000 and 0.15% thereafter.... every month. So €3000 in savings equals €23 per month, €276 per year. I know it's not huge.... but rather have it in my pocket.
.

You're in for a big surprise at the end of the year.

2% PER YEAR interest on first €1000 = €20 for the entire year. €3 for the entire year for the 0.15%, then DIRT tax reduces it by about 30%.

Unfortunately your €276 will be €16

Sorry

KeyserSoze

the groutch wrote:

the reason for so many utilities insisting on DD is the amount of scumbags who will leave a rental property without any notice, and leave a big bill accruing that the landlord rightfully wants nothing to do with and will leave the utility company out of pocket.

I've experience with that too!!!