Easy Energy - Direct Debit Explained
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Our guide to the benefits and drawbacks of direct debit on your gas and electricity bills
Looking for the quickest and easiest way to pay your gas and electricity bills? Direct debit's your answer.
But, is it the most cost-effective? Unfortunately not, according to reports.
The six big energy companies have recently come under fire regarding their direct debit policies.
It seems that overpayments, underpayments and facing sudden energy debt are all common complaints of customers who pay by this method.
We have a look at how direct debit works - and how you can use it to your advantage.
How direct debit works
Your gas and electricity supplier provides you with an estimate of how much energy they think you'll use over a year. They then divide that sum by 12 and take it from your account, every month, by direct debit.
Their estimates are based on a number of factors, including the size of your property and how many people live there. As it's a fixed amount of money each month, you might find that you're in credit in the summer (when you use less energy) and in debt in the winter (when you use more).
If your direct debit is quarterly, you may only pay for what you've used, but you're unlikely to get the same discount as with a monthly direct debit.
The benefits
* Most energy companies offer discounts to customers who opt to pay by direct debit, so this is a good option for those looking to save some money.
* Paying monthly also means that your energy prices are, supposedly, the same every month, which is good news when budgeting.
The drawbacks
* If gas or electricity prices increase over the year - as we've seen them do recently - then those price hikes will be reflected in your direct debit.
* Because energy companies can use estimated, rather than actual, meter readings to determine your annual energy usage, direct debit can sometimes be set too high or too low. Too high and you might be paying more money than you need to - and you'll have to wait months to receive a refund. Too low and you could be slapped with a huge energy bill at the end of the year.
Using direct debit to your advantage
Be smart if you're using direct debit. Check your bills regularly and take your own meter readings. This will help to ensure you only pay for as much energy as you use.
For a full list of what you can do to use direct debit to your advantage, including tips on asking for refunds or filing complaints, see Ofgem's guide to direct debit.
Article Source: Articlelogy.com
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