Cancelling a direct debit is straightforward, but if you’ve never done it before, you may wonder how to cancel it properly. Although it is simple to cancel a direct debit, you can do a few things to ensure the cancellation goes smoothly.
Cancelling a direct debit can give you more control over your finances. Perhaps you forgot to cancel a subscription after a free trial or would like to slim down your outgoing finances to reach a financial goal. If you’re worried about what will happen if you can cancel a direct debit without the company’s approval or if the company can still take your money, you’ve come to the right place.
If you’ve reviewed your finances and would like to cancel one or more direct debits, this guide will show you how to cancel direct debit payments, when you can cancel a direct debit, and what happens once you’ve cancelled.
How can I cancel a Direct Debit?
You can cancel your direct debit in several different ways, including writing to your bank, building society or the company the payment goes to, giving them a call, visiting a branch, using online banking or using the banking app.
Some banks or organisations will require written confirmation to officially cancel your direct debit in addition to your contacting them through one of the above methods. You can do this by sending a letter confirming that you would like to cancel your direct debit. The letter should include:
- Your full name
- Details of your intention to cancel
- Date of cancellation
- Your account details with the company
- Contact information in case there are any problems
- Details of your direct debit (Amount, What it’s for)
You should keep your bank, and the organisation updated and let them know when your direct debit payments will stop. You should give your bank at least three working days’ notice before the payment is due, so you are not charged again.
When can I cancel a Direct Debit?
You can cancel your direct debit at any time. You can do this through your bank or directly with the company you are being charged by. If you’re wondering who can cancel a direct debit, it must be the account holder. This is to prevent fraud and protect your identity.
To avoid being charged again, you should check which date your direct debit payment usually leaves your account. You can cancel your direct debit well before this date, so you don’t have to pay again. Let the company know you’ve cancelled a direct debit so they can remove you from their system. If you cancel your direct debit outside of normal working hours, at the weekend, or on a bank holiday, it may not process until the next working day.
Cancelling a direct debit that you no longer need means you can save money. For example, if you cancel a subscription such as an Xbox Game Pass, you could save that money each month into one of our jars and use it for something you really want.
If I cancel a Direct Debit, can the company still take money?
No, they can’t. It’s your money and your bank account, so you’re entitled to cancel your direct debits. As soon as you inform your bank or the company that you wish to cancel your direct debit, they should immediately take action.
Once you’ve cancelled your direct debit, companies shouldn’t be able to take money from your account. Banks are obliged to action your request, which usually happens with no problems. However, even after the direct debit is cancelled, you may still have to pay if there is a balance remaining.
If you have a contract with a company, check the terms and conditions before you cancel. You may have to pay the remaining amount even if you cancel your direct debit. For example, if you have a PCP agreement for your car, you cannot cancel your direct debit unless you meet the terms of your agreement. This may include returning the car or paying the remaining balance.
Direct Debit Guarantee
If a company does continue to take money from your account after you have cancelled the direct debit, you should be able to get this back through the direct debit guarantee.
When Will the Goods/Service Stop?
If you cancel your direct debit, your service from the company may not always stop immediately. For example, if you cancel your gym membership halfway through a month, you may still have access to the gym until the end of the month as you’ve paid for that month in advance. Other goods or services may stop immediately. If you continue to buy goods or use a service, you must arrange another payment method.
What Happens if you cancel a Direct Debit without the approval of the company?
You can cancel your direct debit just by informing your bank. However, we recommend that you inform the company too. This gives you peace of mind that you have informed all the parties involved. The company does not need to approve your cancellation unless your direct debit is connected to a contract or outstanding balance. In this case, the company could take action against you if you do not pay.
If you don’t notify the company, there could be a delay in communication between them and your bank, and they could mistakenly charge you. If they do, you should be able to calm this back through the direct debit guarantee.
Will cancelling a Direct Debit affect my credit rating?
Generally, cancelling a direct debit will not affect your credit rating. If you are cancelling a direct debit that is not connected to a contract or an outstanding balance, such as a subscription service like Netflix or Amazon Prime, this won’t affect your credit rating.
However, if cancelling your direct debit means that you will breach a contract or result in your missing payments, this will affect your credit rating. Think carefully before you cancel your direct debit, and check the small print to ensure you will not get into financial difficulty if you cancel.
Once you’ve cancelled your direct debit, you may get a confirmation letter from the company to let you know everything is sorted. You should keep this on file for your records.
A HyperJar card can help you manage and keep track of your direct debit payments, so you’re always on top of your spending. Our handy savings jars give your pounds a purpose and help you visualise your savings and spending all in one place.