When comparing electricity offers, the choice of how bills are paid consistently ranks at the top of people’s priorities. At the end of the day it should be up to the consumer how they want to pay, yet some offers are only available if you agree to pay by Direct Debit or accept reduced payment terms.
Almost all electricity suppliers issue bills ‘in arrears’. This means you received the electricity for 30 days (monthly) or 90 days (quarterly) and at the end of the period they bill you. You normally have 14 days to pay from the date the bill was issued. There are a couple of exceptions which involve paying for the energy for the period in advance and paying the difference when the bill is issued.
All products require the electricity supplier to carry the cost of the consumer, in both cash and credit risk, this is where certain payment options can become a saving which is passed onto the consumer.
In general, your account should represent what you have agreed to pay and an option to make payment without incurring a fee needs to be available. That said, certain payment types do cost more money. These costs are not from the electricity supplier but from the payment provider.
Expensive Ways to Pay
Type of payments that incur fees include Cash, Cheques and Money Orders (almost obsolete now) which are usually transacted over the counter through Australia Post, and Credit Cards. According to the Australian Securities and Investments Commission’s ‘Money Smart’ website, electricity retailers have the lowest credit card processing fees of all consumer products ranging from 0.4% to 2.5% depending on the card type.
Best Ways to Pay
Direct Transfer via BPay or Direct Debit via a bank account are usually the lowest or no-cost options and are generally the easiest. These methods are typically the best because you avoid the risk of forgetting to pay and incurring late fees and, for the most part, paying this way provides you with access to the best offers.
Avoiding ‘Bill Shock’
There are always other options to support payment like bill smoothing or a scheduled payment plan, where a small amount is paid towards the account each week or month and then adjusted to the actual amount once the bill is generated at the end of the billing period. This works a bit like the pre-paid option and helps avoid ‘bill shock’. These are normally reserved to direct debit facilities due to the unnecessary effort of manually making the payments.
Remember it is always your choice as to how you pay, which also means it is your choice to pay the fees if they exist which should always be clear on an electricity offer. If you have more questions about payment options and would like to speak to our Queensland-based customer service team you can call on 1800 040 168, Mon-Fri, 8.30AM – 5.30PM.