As winter is around the corner, Martin Lewis, a renowned financial journalist, recently advised in his ‘Martin Lewis Money Show’ to “Call up and get your money back” to Energy customers. In his show, he urged the people who pay energy bills via credit card to cash refunds in their accounts. He claimed that it would minimize the cost associated with energy bills in the upcoming winter.
Who is Martin Lewis and why does he care?
Martin Lewis is a UK-based financial journalist. He is the founder of the “Money Saving Expert” website, which is currently one of the UK’s biggest consumer help sites. It was in 2012 that he first started his TV show, The Martin Lewis Money Show. It has been airing for 12 seasons and is the most-watched current affairs program in the UK.
In his show, he offers numerous guidance to people on various financial matters. The reason he cares about the common people, well, that’s something only he knows. He recently addressed an issue on energy credits on his TV show. In it, he advises people to reclaim their excessive energy credits to increase cashflows into their households. In the coming sections, we will look deeper into this and how exactly this credit can benefit you.
What is the direct debit cycle?
The direct debit cycle is the process in which your energy bills accumulate over a while, say a year. This will likely lead to a reduction of credit on your part due to direct debit payments. It is common knowledge that households use a lot more energy during the winter season, especially for heat and light.
But, your overall energy bill always stays the same throughout the entire year. This is because the energy suppliers ‘level out’ your usage to avoid the bill from going up and down. This is a common practice employed by British Gas, E.On, EDF, OVO, Octopus, or any other supplier. This also helps the customers as they can have a regular payment that they can financially account for.
Advantages of Direct Debit Cycle
Now, that we know what the direct debt cycle is, let’s take a look at the numerous advantages behind the direct debit cycle.
- Evening up your bills for the year: Throughout the year, energy usage fluctuates with different seasons. In the summer season, it will probably used less, While in winter, with all the heaters and lights, the usage will probably be higher. Using this direct debit cycle, the customers only need to pay the same amount during each month.
- To build credit: As the monthly energy payments are fixed, the customers end up with a “credit” if they save energy during a month. This credit can be later used in the future.
- Budget management: As the monthly charges are fixed, you can easily calculate your budget for the month without any hassle.
Why should you care about this energy credit?
This energy credit is the money you have overpaid to the energy providers. During the summer months when energy consumption is low, the monthly payment exceeds the actual bill. This extra amount is treated as credits that are stored in the customer’s account. As the expenses during the winter season are quite large compared to other seasons, you can use this excess credit to increase your cash flow in your household.
If you leave this credit untouched, the company holds on to this found without you gaining any sort of profit from it. But if you reclaim it, you could probably use it in case of an emergency. Hence, we can say that reclaiming the credit associated with energy bills is vital.
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