Does a new card mean changing Direct Debits?

Have you lost your debit card, and needed to get it replaced? Or perhaps your bank has issued you with a new card with a different number? This happens when banks switch between different credit card companies (e.g. from Visa to Mastercard). Whatever the reason, you may see your new card as both a blessing and a curse. Sure, it looks shiny and new, and it can facilitate contactless payments. But a new card number inevitably means disruption. You’ll need to go to the trouble of logging your new card on all your favourite online stores and subscription services.

You may also wonder if you need to change your direct debits whenever you get a new card? We’re so reliant on direct debits for paying our bills, managing our services, and keeping our daily lives ticking over that having to change them could be seriously disruptive.

So, let’s answer the question once and for all – if you get a new debit card, do you need to change your direct debits?

How do direct debits work?

There’s some confusion as to how direct debits work, and how they differ from alternatives like recurring credit or debit card payments.

So, in the interests of clarity, let’s take a look at how direct debits work.

A direct debit is an instruction to your bank to allow someone to take payment. This may be your energy supplier, your mortgage company, your landlord, or anyone else you need to pay on a regular basis. Many retailers also allow customers to pay off large purchases in instalments via direct debit.

Payment is made directly by your bank, and you need to either fill in a paper form or set up a direct debit online to authorise the collection of payments. Direct debits can also be used for one-off payments, although this is much less common.

Direct debits vs recurring card payments

If you make recurring payments to a utility company, a subscription service or your landlord / letting agent, etc. there are two ways to do this. You can make payment by direct debit or you can set up a recurring debit card payment.

These are functionally very similar. Both will enable a company to extract an agreed amount from your bank account on a set day. The difference, of course, is that one is taken directly from your bank account, while the other uses your debit card as the mechanism for withdrawing funds.

Benefits of paying by direct debit

Paying by debit card is beneficial in lots of ways. It’s quick and easy to set up, flexible, and as long as your bank account remains open and contains sufficient funds, payments are guaranteed as soon as your direct debit is set up.

How does getting a new card affect your direct debits?

As you’ve no doubt guessed, getting a new card does not affect your direct debits. A direct debit is linked to your bank account rather than your debit card. As such, no matter how much your card and card number change, your direct debits will remain unaffected.

If your card has been lost, stolen, or replaced by your bank with a card that has a new number this means that you won’t need to worry about changing your direct debits. However, it’s worth taking a look through any recurring payments for any subscription services like Amazon Prime, Netflix etc. Unless you update your card details with these companies, payments will fail and your account may be suspended.

We can help

If you’re interested in finding out more about direct debits and recurring card payments, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.