How to Cancel a Direct Debit Transaction on a Debit Card

Direct debit is a convenient service that consumers can use to makes payments on recurring bills such as gas and electricity, student loans and installment payments. With direct debit, consumers don’t have to worry about not being able to pay on time and incurring penalties as their payments are automatically debited from their bank account. However, there can be unavoidable circumstances where one may have to cancel a direct debit transaction. Though easy, it is recommended that you do so promptly to avoid unnecessary inconveniences and hassles.

Overview

• Some people, especially those who lead busy lives, prefer the convenience of using direct debit to make payments. With this service you don’t need to issue checks each and every time, or go to a bank or payment centre to settle bills that are due. However, with direct debits, you would have to regularly monitor your bank account to ensure that you have enough funds for your scheduled debit payments.
• Having insufficient funds can result to you getting charged with bank overdraft fees and late charges with your vendor, among others. In order to stop such unsavoury things from happening, you need to issue both your bank and vendor a stop order on direct debit payments.

Contact your vendor

• Inform your vendor in writing of your desire to cancel a direct debit transaction with them. Also include in your letter how you would continue paying your obligations, such as via check or cash payment. To help your vendor locate your account, list your name, address, bank details, and your account number with them. In some cases it is possible for you to cancel a direct debit transaction online, especially if you have signed up for such a payment service through a company’s website.

Communicate with your bank

• Next write a letter to your bank instructing them to stop doing direct debit payments to your vendor. Include in your letter your name, address, account number with the vendor, debit amount, and payment schedule. With some banks, customers are allowed to cancel a direct debit transaction online.

Monitor your bank account for any unauthorized payments

• Check your bank account one week before the next scheduled debit payment to see if any unauthorized payments go through. Even though some companies automatically terminate a direct debit transaction upon receipt of a request, there are some that still continue to forward payment demands or requests to banks.

Follow-up with bank and vendor

• If you want to cancel a direct debit transaction on a debit card, another important thing that you need to do is to conduct follow-ups. Contact your vendor to ensure that your cancellation request has been successfully carried out. Also, call your bank to verify that it has indeed cancelled your direct debit transaction.