Direct debits are a regular part of everyday life but how many do you actually need?
That’s the question posed by Money Saving Expert founder Martin Lewis, who has issued a two minute direct debit challenge to Brits who think they’re overspending.
Speaking on This Morning, Martin said the trick saved a lady on his web forum £600.
Costly subscriptions on direct debits
Martin said: “Many of us have costly subscriptions on gyms, mags, dating sites, packaged bank accounts and more, yet rarely or never use them – or with time and house moves, forget about them altogether. It’s likely hundreds of millions are wasted this way.”
In fact, there are instances of people paying direct debits for years for something they’d forgotten about or never use.
Martin advises you to ask these three things about each standing order to see whether you really need them or not:
1. Do I need it?
2. Is it worth it?
3. Could I get it cheaper?
If the standing order or direct debit fails one of these tests, and you’re out of contract, cancel it.
It’s also worth keeping up with what’s coming out of your bank account as any direct debit you don’t recognise should be investigated and cancelled as soon as possible if it’s fraudulent.
If you use online banking, this process should be fairly straightforward. If not, you can ask your bank for a list of regular payments.
Harder to spot costs
There are also harder to spot costs, with Martin warning about the hidden recurring costs that are often used for payday loans, gaming subscriptions and adult websites.
If you spot recurring payments for companies you haven’t heard of, do a quick Google search to identify them, or contact your bank or card provider.
Remember there are usually cheaper deals out there on gyms, broadband, phone contracts, magazine and TV subscriptions, energy bills and more, if you look around.