Most of us will pay our bills via one method. We barely think about think about why we have set the bill payments up the way that we have done, and whether it’s the best or cheapest method of payment. This article shows the main five ways that we all pay our bills, and the advantages and disadvantages associated with each type of payment.

Payments by Direct Debit
This is usually a monthly occurence and is normally one of the cheapest (and therefore best) ways to pay your bills. However the major disadvantage to paying by direct debit is that you have no control over how much is taken each month – the amount will depend on how much the bill was (although you should be informed in advance how much will be taken and on what date). It is sometimes not a good option to choose if you are working to a tight budget.

Payments by Standing Order
With a Standing Order, you have control of the money – you tell the bank how much you want to pay and on what date each month. This makes it easy to plan your budget and stick to it. However, some companies will not accept standing order payments as your bills will probably vary each month, meaning they would have to estimate the bill. This means that they may not get enough money to cover your usage. Bear in mind that if you do not have enough money in your account on the day that the Standing Order is due to be taken out, you will incur penalty charges from your bank.

Regular Payment Plan
These are where you setup a plan with the company whereby you pay some money weekly, fortnightly or monthly. Most companies will accept this form of payment. You will usually be given a passbook or card which you use to make the payments due. However, if you miss any payments, the company may not let you setup another payment plan.

Prepay Meters
Sometimes for gas or electricity, a meter will be fitted. You need to buy cards topped up with money to put into the meter. The meter will then read how much money is on the card and will supply the gas or electricity until the money on the card runs out. When the money runs out, no more energy will be supplied. This option is good if you are finding it difficult to find someone to supply you because you have a poor credit history. It also means you can budget easily because you put money on the card and when it’s run out, it’s run out. However, the fitting of the meter is fairly expensive and energy bought via the meter is normally more expensive than the standard way of receiving the energy.

Quarterly Bills
Bills are sent every 3 months (each quarter). These can sometimes hit you quite hard as the bills can be quite high. It is a good idea to keep old bills so that you know approximately how much to expect.

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