Direct debits: Many won’t reinstate them post lockdown – what to do with the extra cash | Personal Finance | Finance

Direct debits for things such as gym or music services have faced cancellation across the board as coronavirus hits everyone’s wallets. Recently conducted research has highlighted just how dramatic these changes have been.

If this occurs, it could leave people with hundreds of pounds in extra income.

Anthony Morrow, the CEO of OpenMoney, commented on recent direct debit changes and provided advice on what consumers should do with the extra income they find themselves with.

As he detailed: “If there’s a positive to take from the current situation, it’s that many of us have had some time to reflect and re-evaluate.

“For some this has led to changes in financial habits. Learning that people are finding ways to cut back and save more money is encouraging.

“To ensure you don’t inadvertently spend the money you’ve saved when lockdown is lifted, look to set up a standing order to transfer what you’ve been able to save directly into a separate bank account on the day you’re paid.

“If you’ve got an ISA or savings account, even better – transfer the money there to start building up a nice nest egg.

“Regardless of how small savings might seem, making positive changes anywhere you can will help in the future, particularly if it’s something you can maintain for the long term.”

Some people may now look at their direct debits in an effort to save money.

There’s no harm in doing this but it should be noted that cancelling direct debits needs to be handled with care.

Insight from credit experts TotallyMoney highlighted that simply cancelling direct debits without providing warning could show up as a missed payment on their credit file.

This in turn could negatively impact their credit rating.

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