4 ms·

Is "direct debit" not a thing in the US? All of my regular bills in the UK (mortgage, energy, water, internet, insurance, debt, probably some others I'm forget

Is "direct debit" not a thing in the US? All of my regular bills in the UK (mortgage, energy, water, internet, insurance, debt, probably some others I'm forgetting) are deducted automatically from my bank account every month. I don't have to think about it all - and there's zero possibility of nuking my credit score by accidentally missing a payment. Having to remember to write a check for each bill every month sounds like an enormous (and enormously unnecessary) inconvenience. Is there really not a better option in the world's richest country in 2022?

nkohari 4y ago
Direct debit is available (and is very common) but not all vendors support it. Anecdotally most younger people use automatic methods for recurring payments whenever possible, and write checks for one-off purchases, like paying repairpeople. Older folks write checks for everything because that's what they're used to.
brewdad 4y ago
Because of the quirks of the US banking system, my personal philosophy is that no one gets to pull money from my accounts. I will push payments for my bills to the various providers. My payments are still done electronically but I have to go into my bank's BillPay service and direct the amounts and payment dates for each bill. It's a bit more work but it also means far fewer surprises or errors to clean up. I already reconcile my accounts on a weekly basis, so it's only an extra minute or two to set up the payments for the coming week.
jjav 4y ago
> All of my regular bills in the UK (mortgage, energy, water, internet, insurance, debt, probably some others I'm forgetting) are deducted automatically from my bank account every month. I don't have to think about it all - and there's zero possibility of nuking my credit score by accidentally missing a payment. Sometimes, vendors may support doing a recurring ACH transfer out of your account for the total of the month. In terms of mechanism, this is exactly the same as a check which is also just an ACH transfer out of your account. Not all vendors support this. There is increased risk, however. By giving them blanket authorization to deduct whatever they want out of your bank account you now have the risk that they might get it wrong and deduct too much. If you have enough money in the account to absorb the difference it'll eventually get sorted out. But what if you don't? Your balance may go to zero and all those other recurring payments get rejected and you'll get hit with tons of late payment fees and you'll be stuck with those. So you might nuke your credit score with all those late payments that weren't even your fault. My absolute preferred approach is to do auto-pay to a credit card. That way I'm insulated from risk (at least in the US, credit card laws strongly favor the consumer; perhaps the only laws in the US that favor the consumer so well). Any mistakes in the system are not my problem and can't impact my balance. But for vendors who can't bill to a credit card or charge too many fees to do so, the safest approach is still a check.

nkohari 4y ago

Direct debit is available (and is very common) but not all vendors support it. Anecdotally most younger people use automatic methods for recurring payments whenever possible, and write checks for one-off purchases, like paying repairpeople. Older folks write checks for everything because that's what they're used to.

brewdad 4y ago

Because of the quirks of the US banking system, my personal philosophy is that no one gets to pull money from my accounts. I will push payments for my bills to the various providers. My payments are still done electronically but I have to go into my bank's BillPay service and direct the amounts and payment dates for each bill. It's a bit more work but it also means far fewer surprises or errors to clean up. I already reconcile my accounts on a weekly basis, so it's only an extra minute or two to set up the payments for the coming week.

jjav 4y ago

> All of my regular bills in the UK (mortgage, energy, water, internet, insurance, debt, probably some others I'm forgetting) are deducted automatically from my bank account every month. I don't have to think about it all - and there's zero possibility of nuking my credit score by accidentally missing a payment. Sometimes, vendors may support doing a recurring ACH transfer out of your account for the total of the month. In terms of mechanism, this is exactly the same as a check which is also just an ACH transfer out of your account. Not all vendors support this. There is increased risk, however. By giving them blanket authorization to deduct whatever they want out of your bank account you now have the risk that they might get it wrong and deduct too much. If you have enough money in the account to absorb the difference it'll eventually get sorted out. But what if you don't? Your balance may go to zero and all those other recurring payments get rejected and you'll get hit with tons of late payment fees and you'll be stuck with those. So you might nuke your credit score with all those late payments that weren't even your fault. My absolute preferred approach is to do auto-pay to a credit card. That way I'm insulated from risk (at least in the US, credit card laws strongly favor the consumer; perhaps the only laws in the US that favor the consumer so well). Any mistakes in the system are not my problem and can't impact my balance. But for vendors who can't bill to a credit card or charge too many fees to do so, the safest approach is still a check.