It’s easy to get confused about the difference between a billing address and other addresses such as home and shipping addresses. Often they are the same, but they have very different meanings so you need to know which is which and why each is important.
Ultimately, the billing address is where the bill for a product or service is sent so it can be paid by the recipient. Note that billing addresses can vary in their exact meaning regarding utilities and medical expenses.
Below we will go through the different kinds of addresses and what they mean.
Personal billing address
Your personal billing address is the address you give when applying for a credit or debit card. This address is associated with you on your bank account and other payment functions.
Your billing address is usually the address where you live, but not always. For example, a teenager might open a bank account while still living at their parents’ house, and then move out. If they do not update their bank account details, then their billing address will remain their parents’ address, and not where they now actually live.
In such a scenario, you need to update your address when ordering something online with a bank card. You must always enter the billing address when making such a purchase online, even when it’s more convenient to have the purchase delivered to where you actually live. Otherwise you will need to add a separate shipping address.
How a shipping address works
If you live at a different residence to where your billing address has been registered with your bank details, then you will need to change the shipping address if you want to order goods online and have them delivered to your home. This is because you must enter the billing address for an online purchase or the order may not be processed. All online retailers provide a shipping address function for this purpose.
Changing your shipping address can also be useful if, for example, if you are buying a gift for someone and would like it delivered straight to their home instead of yours. Then you simply enter your billing address for the payment and change the shipping address to that of the intended recipient.
The shipping address fields usually appear underneath the billing address fields when you enter your bank details for an online purchase. Never change your billing address to a different one, or payment will not go through. For security reasons the bank will not recognise the address that the bank card is trying to make a payment with and thus reject it.
Why your home address is different
Your home address is where you live and not necessarily related to payments or your bank details. To open a bank account you need to give the bank your home address, which then becomes your billing address. If your living circumstances change, it’s not always necessary to update your billing address as in the case of the teenager above.
You must update your billing address to your new home address if you move house and sever all connections with your previous address. Otherwise important information will be mailed to your old address and you risk losing sensitive information. All bank cards have an expiry date and new ones are sent out every two to three years. If you move house without updating your billing address you will not receive any new bank card you ordered as it will be sent to your old address.
Billing address for utilities and medical expenses
Utilities include the likes of electricity, gas and water, and the billing address for these services can either be the building where the utilities are used or another address used by the owner of the building. In the latter case, the billing address could be the building owner’s home address, saving them having to go to the building in person to collect the bills in order to pay them.
Medical expenses bills are sent to a billing address that is not necessarily the address of the person who received the treatment. For example, a child of divorced parents may not reside at the address where the bill is sent, depending on the agreement between the parents. Or a benefactor may pay for someone else’s medical treatment, and thus the billing address will be that of the benefactor.
What happens if a billing address is wrong?
An incorrect billing address can result in important and sensitive banking information getting mailed to the wrong address. This will inevitably lead to delays in receiving important documents such as credit and debit cards.
It is vital to update your billing address when you move house, so that potential issues like new cards, bank statements and other sensitive information don’t get sent out to the old address.
We Can Help
If you’re interested in discovering more about billing addresses, or any other aspect of your business and its finances, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.