Coping with rising energy prices with a prepaid MasterCard®

Towards the end of 2012, all of the big six energy companies announced price rises of between 6% and 10.8%.Yet because earnings just haven’t kept up with the rising cost of living, to many people it will feel as if wages are £1,600 lower than back in 2009. To help soften the blow, it’s important to check that the cheapest power tariff has been chosen. What’s more, opting to pay by Direct Debit can also shave a little off the bill, as companies often give a discount if the customer pays in this highly efficient way.

Perhaps surprisingly, the best Direct Debit service currently available in the UK isn’t from a bank – it’s offered by the Cashplus prepaid MasterCard. This prepaid card’s Direct Debit service is so special because unlike with banks, there’s absolutely no penalty fee to pay if the payment bounces.

There are also free alerts if it looks likely that a Direct Debit is likely to be rejected due to insufficient funds in the account, giving time for the customer to top up it up. But that’s not all – if the customer doesn’t have enough money to cover the payment, uniquely, the Cashplus prepaid MasterCard can offer an instant loan of up to £1,000. Once approved, this loan is guaranteed to get the Direct Debit paid on time. Apart from helping to keep the lights and the heating on, paying bills on time can save the customer from being hit by late payment fees from the  company that was due to be paid.

As with a bank, as many Direct Debits as the customer needs can be set up to be paid from the card, so discounts could be enjoyed from all sorts of suppliers. So how much can be saved by paying by Direct Debit? The discounts vary from supplier to supplier, but as an example, EDF Energy takes a useful 6% off the bill. That means that a typical customer who pays for both gas and electricity by monthly Direct Debit, saves up to £79 a year. And BT offer a ‘payment processing’ saving of £3 per month if a customer chooses to pay via Direct Debit – that’s £36 less to find each year. So it’s easy to see how the savings could quickly add up.

With the cost of living seemingly rising regularly, it makes sense to get the best deals by paying via Direct Debit – preferably with a prepaid MasterCard.