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

Malcolm Tatum
Malcolm Tatum

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.

Paying by direct debit saves money since no checks have to be mailed, and no postage costs are incurred.
Paying by direct debit saves money since no checks have to be mailed, and no postage costs are incurred.

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.

Using direct debit makes it easy to track payment histories, and can come in handy if some sort of dispute arises.
Using direct debit makes it easy to track payment histories, and can come in handy if some sort of dispute arises.

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.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments


I have paid almost all of my bills through direct debit and I think it's a great service. I happen to earn a substantial salary, so I'm not usually concerned about my bank balance running low during the month. I just like the convenience of not having to worry about paying the utility or cable bill every month. I know when my mortgage payment and car payment will be made.

The only con I've experienced since i started making direct debit payments is the tendency to overlook the other obligations from time to time. I'll sometimes forget to write a check for a charity organization or a local store that doesn't accept direct debit payments. Since I'm not sitting down at a table writing check after check anymore, I need reminders that a few bills are still unpaid.


I would like to get most of my elderly mother-in-law's bills paid through direct debit, but she still prefers to write her own checks and mail them directly to the creditors. I think a direct debit payment eliminates the possibility of a payment getting lost in the mail or being forgotten. She has lost track of several paper bills in the past, and some important checks have been misdirected because of her poor handwriting.

She has two sources of income which arrive basically at the same time every month. I think paying by direct debit makes the most sense for her. However, our own income sources aren't always so regular. There are times when our available funds are very low until the next paycheck arrives. I can see where this would be a problem with direct debit payments. The bank will make those payments regardless of our actual balance at the time, so there's always a chance the money won't be in the account when the bill is scheduled to be paid.

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