There are many ways to pay the bills or fees that you owe, and the two most popular ones are either via direct debit or credit card. .
If you are debating whether you should choose direct debit or credit card to regularly pay for bills, subscriptions, memberships, then here is a comparison between the two to help you decide.
|Direct debit||Credit card|
|Definition||According to the Australian Securities & Investments Commission (ASIC), “When you set up a direct debit, you are allowing a service provider, such as your private health insurer or your gym, to automatically withdraw money from your account at set times to pay your bills or make your loan payments.”||In comparison, a credit card is “A plastic card having a magnetic strip, issued by a bank or business authorizing the holder to buy goods or services on credit.”|
|Connected to||Any payment type||Not required to be connected to a checking account|
|Application process||Fairly simple – Just need to give permission for the direct debit company to withdraw money from your account||Somewhat difficult|
|Interest charged||There is a failed payment fee that is charged.||If the credit is not repaid by the due date then interest is charged on top of the outstanding bill.|
|Security||Direct debit billing solutions have multiple security levels in place that help prevent risk and fraud.||Credit cards can be easily stolen and run the risk of online scams. However, if your credit card is lost or stolen, you are able to cancel that card and are usually not legible to pay for any stolen goods or services.|
|Benefits||Convenience: Set the date in which you want to be billed and the direct debit billing services will take care of the rest. You won’t have to set time out of your day to pay the bill as that becomes automated process.· Bills are paid on time, every time||Buy now, pay later: With a credit card, even if you don’t have the sufficient funds to pay for your membership or bills currently, you are still able to pay for them on credit. As long as this is repaid by the end of the month, no extra interest will be charged.|
Hopefully this comparison has helped with the great debate of whether you should choose a direct debit or credit card. There are both advantages and disadvantages to both direct debit or credit card. However, due to convenience and safety, it is fair to say that direct debit is increasingly becoming the payment method of choice and the way of the future. One great direct debit billing solution is Ezypay which offers a flexible and protected direct debit service that means more time spent on other tasks than worryig about your payments. If you would like more information on Ezypay, please feel free to contact us.
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