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The method for setting up direct debit payments can depend on the company you wish to pay, as well as the online banking service that you use. Usually it involves filling out a paper form and sending it in, or even just filling out a form online and providing your banking information. You will need to read an agreement, and authorize a company to remove the direct debit payments from your checking account. Many people find that using direct debit is a great way to make sure that bills are paid on time, and that payments are not forgotten; of course, it can be a problem if funds ever dip below zero in the account, which can lead to overdraft fees.
There are many different types of bills that can be paid by direct debit payments. These may include car payments, payments on loans, as well as monthly utility bills or any bills where a monthly or quarterly payment is required. You may need to set the direct debit payments up through your bank, or through the company itself; setting it up through the company itself is more common. The company should provide a form for this purpose. If they don't, you can call and request one. Usually, you will just need to provide your name, account number, and your checking account and routing number.
The agreement you sign will specify the day of the month on which the direct debit payments will be withdrawn. This is important to note when you are setting up the payment so you can plan ahead, and be sure to mark it down in your checkbook to avoid overdrafts. Some companies will send an alert a few days before the payment is withdrawn. This can be beneficial to set up at the same time you set up the direct debit payments, because it can alert you to any potential billing errors before the money is withdrawn. In general, it is a good idea to only set up direct debit for bills that are for a fixed amount per month, so you don't get any nasty surprises.
Some companies will allow you to attach your checking account to your account, but will not make automatic debits; you still must log in each month and authorize the payment. This method of setting up direct debit might be better for those whose bills vary each month, or who just want a little more control over the process. Setting up payments online can also help the environment because less paper is needed to mail the bill. Furthermore, it can help save money on stamps and on checks. If you find that you don't like using direct debit, usually a simple phone call to the company, or logging into your account online can put a stop to it.
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