What Are the Pros and Cons of Paying by Direct Debit?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 30 March 2014
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Paying by direct debit is a common strategy today. Banks and other institutions make it easy to set up this type of payment option for a number of debt obligations, including utilities, monthly insurance premiums, and monthly mortgage payments. While very convenient, it is important to note that there are some potential drawbacks to this approach that may make using a direct debit approach for some bills a little less attractive. Among these is the potential for forgetting to deduct the amount from the check register as well as losing control of the bill payment process.

When it comes to the advantages of paying by direct debit, convenience is always at the top of the list. The ability to set up recurring payments as direct debit transactions means there is no need to spend time writing out checks and slipping them in the mail. There are also no worries about overlooking a bill and later being assessed late fees due to a delayed payment.

Another benefit of paying by direct debit is saving a little money. Since no checks have to be mailed, there are no postage costs to be incurred, and no need to buy envelopes. Some businesses even offer clients slight discounts if they agree to set up a recurring electronic payment, which helps to save even a little more money.


Paying by direct debit also makes it easy to track payment histories. Typically, the account holder can log into his or her account and easily obtain a listing of when each automatic payment was made. This makes it easy to verify which payments were issued, and when those issuances took place, a benefit that can come in handy if some sort of dispute arises with a vendor.

While there are a number of advantages to paying by direct debit, consumers should be aware of a couple of potential pitfalls. One has to do with losing control of the process. While the need to write checks is eliminated, that does not mean the direct debit payments do not need to be tracked. Failure to do so could leave a checking account in disarray. In addition, making changes to direct debit payments can be somewhat cumbersome. For example, if payment dates need to be changed for some reason, such as a delay in the deposit of a paycheck, the time and effort needed to do so can sometimes be significant. For this reason, some consumers prefer to use a manually controlled format of sending out electronic payments rather than an automated approach.


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