How to set up direct debits using your credit card

How to set up direct debits using your credit card

Everyone has regular monthly expenses and, considering our busy schedules, staying on top of them can get challenging. These could include gym memberships, utility payments and streaming subscriptions, among others. Rather than keeping track of the bills month on month, you may want to consider just setting up direct debits on your credit card.

When you pay direct debit using a credit card, you’re not only ensuring you meet your financial obligations on time, but you’re also keeping your credit score in check. However, before you rush to put all payments on your credit card, there are some risks to keep in mind

How can I set up direct debit on my credit card?

You’ll need to give permission to each provider to automatically debit your credit card for a fixed or variable amount each month.

Each credit card issuer could have a different procedure for setting up direct debit on your credit card, but you can usually do it by reaching out to your service provider or merchant online or on the telephone and providing them with your credit card details, including your credit card number, expiry date and card verification code. If you’re setting up or managing your account online, you’ll see an option of adding your credit card as a preferred payment option. Enter your credit card details and from then on all your payments will be automatically deducted from your account when the next bill is due.

Questionas to ask before setting up a direct debit using a credit card

Setting up a direct debit from your credit card can be a convenient payment option, however before you do it, ask yourself the following:

  • Is the service provider you're sending the direct debit to trustworthy? Use your credit card or debit card to set up a direct debit only for those services and providers that you trust.
  • Are you aware of the steps to cancel the direct debit? Before you set up the direct debit, familiarise yourself with the steps to cancel the direct debit if you don't need it anymore or are planning to close the credit card.
  • Will you be able to make your credit card payments? Most importantly, make sure that you can pay off your credit card bills comfortably at the end of each month before you set up a direct debit. Any unpaid amount may accrue interest, and you'll end up paying more than the actual bill amount, as well as risk falling into debt.

Check your bank statements regularly

Once you’ve set up your direct debit from your credit card, it is easy to forget about it. However, you need to keep checking your bank statement regularly to make sure that you’re being billed correctly and your payments are being made on time.

It is essential to keep track of all your payments because on closer examination you might find that you’re still being billed for services that you might have discontinued, such as a gym membership, or a streaming subscription.

How can I cancel a direct debit from a credit card?

You might need to cancel a direct debit if you're closing your credit card or you no longer use the service that you’re paying. In case of a card closer, ensure your bills continue to get paid on time by setting up direct debits from another account.

If you’re cancelling a direct debit because you no longer use the service, you can simply call your service provider and cancel direct debit over the phone, or you can manage your payment through your online account. You could also contact your credit card provider to cancel your direct debit and ask for a written confirmation.

Check your bank statement regularly to ensure that the direct debits have been cancelled.

What are the possible disadvantages of direct debits from a credit card?

You might be considering direct debit to a credit card as a convenient way to pay your bills on time or to keep your credit scores in check. However, in both cases, you should also be aware of the following risks:

  1. Debt. Most direct debits are typically ongoing expenses, such as utilities bills. Generally speaking, most Australians should attempt to manage their budgets to meet these expenses with a standard debit card. If you’re putting your ongoing expenses on your credit card because you cannot meet them with your regular income, you may want to consider whether putting them on your credit card is the best course of action.
    This can lead to snowballing debt if you’re unable to pay your balance, or even meet minimum repayments, each statement period. Plus, by putting your direct debits on to your credit card you run the risk of accruing interest on these payments. Consider speaking with a financial adviser if you’re struggling to pay your ongoing expenses.
  2. Timing of the direct debit: If the balance on your credit card is due before you get paid, then you might be better off not scheduling a direct debit right then. A single debit might not be a problem, but if you have arranged for multiple direct debits to cover numerous financial obligations, collectively they could send you into overdraw.
  3. Overdraws: You may also easily slip into overdraw if your account balance does not have adequate funds to cover an automatic debit, or if you max out your credit card. Not only this, but if you’re unable to pay your balance in full each statement period, you will accrue interest on your outstanding balance, plus potentially pay a costly overdraw fee.

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Learn more about credit cards

How to increase your Qantas Premier credit card limit

When your income or spending habits change, you might wish to increase your credit card limit. The Qantas Premier credit card allows you to do this over the phone. You can contact Qantas Premier Card Support by calling on 1300 992 700. Unlike some other credit providers, Qantas doesn’t give you the option to increase your limit online.

Qantas will only accept your application if you have a good history of repayment and have not increased your credit or bought another credit product from Qantas in the past six months.

Before approving your Qantas Premier credit card limit increase, Qantas will perform a credit assessment on your current financial circumstances and ask why you would like to increase your credit limit.

To ensure that there are no bumps in your application process, you must provide accurate and recent information about your financial situation. You should also account for any future changes you’re anticipating which could hinder your ability to repay the loan.

Once the assessment is complete, Qantas will either approve or deny your application. If they approve it, you will need to sign a credit limit increase agreement - and you can request a written copy of the credit assessment. However, if your application is rejected, Qantas can opt not to provide a copy of the assessment.

What does Westpac credit card insurance cover?

If you own a Westpac credit card, one of the perks may be  free travel insurance. If you’re eligible, you may be covered if you get sick while travelling, have lost your luggage, have to cancel a trip or have an accident while you’re on the move.

Besides these standard inclusions, the Westpac credit card insurance policy may also cover you for hospital essentials, emergency dental treatment and alternative transport if your original plans go awry. It may also cover loss of income when you get back home after being sick  overseas and your pets’ boarding costs too.

If you have any queries, the Westpac credit card insurance contact number is 1800 091 710. You can submit a claim online.

 

How to increase my Commonwealth credit card limit?

Commonwealth Bank credit cards are extremely popular in Australia for everyday purchases and big ticket items alikers. A number of the card’s functions can be customised, depending on your needs and desires. If you wish to increase your Commonwealth credit card limit using the CommBank, you can usually do so on the app or via NetBank.

In the CommBank app, tap on the ‘Cards’ icon and choose your credit card. Then, click on ‘Credit Limit’ and select the ‘Increasing your limit’ option. If you don’t have the CommBank app, you can also increase your Commonwealth Bank credit card limit through NetBank. Simply log on and go to Settings, then click on ‘Product Requests’ and then choose ‘Credit Card Limit Changes’. 

Once the bank has received your application, they will review your account and payment history. Based on this assessment, your application will either be approved or denied. If approved, your new limit will be applied to your card instantly. 

While increasing your credit card limit may be an easy process, it’s important to remember that you should only request limits that you can manage. A high limit increases the risk of having a larger debt, even with cards that provide low-interest rate options. So, it’s important to think carefully and seek advice from people you trust before increasing your Commonwealth Bank credit card limit.

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

What is the CUA credit card increase limit process?

A credit limit is pre-assigned based on factors like your income, expenses, and debt by the card-issuing company. It varies from time to time based on credit utilisation and changes to your circumstances.

If your income has increased or your liabilities have reduced, you can request for an increase of your CUA credit card limit. You can lodge the request via online banking on the website, or by visiting the closest branch, or by downloading the application form and mailing it. While making the application, you may need to provide information about your income, employment status, desired limit, and the reason for the increase. The card-issuing company will assess your request before approval.

Before you apply for an increase to the credit limit, ensure your bills are paid in full and you aren’t asking for a very steep enhancement.

Do I get HSBC credit card insurance on purchases I make?

As an HSBC credit card (HSBC Platinum, HSBC Platinum Qantas and HSBC Premier World) cardholder, you may be entitled to complimentary international and domestic travel insurance. This HSBC credit card insurance covers you for hospital stays and medical expenses, flight cancellations or delays, as well as lost luggage or personal items.

To be eligible for the insurance, you should have paid for at least 90 per cent of your overseas return travel ticket with your HSBC credit card. The cover is automatically activated without a need to contact HSBC. However, it’s always best to let your card issuer know when you travel overseas. If you have pre-existing medical conditions, you’ll need to contact Allianz directly to organise cover for these as they aren’t covered by the insurance. You can call Allianz on 1800 648 093.

The complimentary international travel insurance that comes with your HSBC Platinum credit card is valid for up to four months from the date of your departure from Australia. Your HSBC credit card insurance cover also covers your spouse and dependent children if 90 per cent of their travel ticket is purchased using your HSBC card.

 

How can I increase my credit card limit on my American Express card?

If you want to increase the credit limit on your American Express (AMEX) credit card, you will need to apply through the AMEX Online Services, or by calling the number on the back of your card. You may need to share personal information that the bank can use to assess whether the requested limit is suitable for you and your current financial status. Once your application is approved, your new limit will be ready for use within an hour.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

How many numbers are on a credit card?

The numbers on your credit card actually follow a universal standard which is used to identify specific functions. Each credit card has a different amount of numbers. Visa and Mastercard have 16, American Express has 15 and Diner’s Club has 14. 

The first number on a credit card always identifies what type of credit card it is. Visa cards start with a 4, whereas Mastercard starts with a 5 and American Express with a 3. The remainder of the digits represent the account number, including the last number which is used to verify that your credit card is actually valid. 

Credit cards also have additional verification numbers, which are mainly used when the card isn’t present for phone and online purchases. These are the three-digit numbers on the back of Visa and MasterCard or the four-digit numbers on the front of an American Express card.

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.

How do credit cards work?

Think of credit cards as a short-term loan where you use the bank’s money to buy something up front and then pay for it later. Unlike a debit card which uses your own money to pay, a credit card essentially borrows the bank’s money to fund the purchase. When you apply for a credit card, the bank assesses your income and assigns you a credit limit based on what you can afford to pay back. At the end of each billing cycle, which is usually monthly, the bank will send you a statement showing the minimum amount you have to pay back, including any interest payable on the balance.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.