Silver membership is free but you cannot play online with friends - only download demos etc
Gold membership is £39.99 a year or £14.99 for 3 months (IIRC) this lets you play online with friends and access premium content
you can pay via your bank by setting up 'auto renewal' which will automatically take £39.99 a year from the start date of your membership, however sometimes MS have special offers on the dashboard which are worth looking out for (e.g. I got 12 months for £23.99 from the dash).
The alternative is using membership cards brought from retail outlets, you do not have to auto renew with these just top up when you want for example if you purchase one 12 month and one 3 month card you don’t have to wait until one ends just add both to your account and you will have 15 months of live (this is the same for all live gold memberships BTW). the advantage here is sometimes retailers have special edition memberships like the one coming out with GoW 3 where you pay £39.99 for 12 months and get a few months free.
Hope this helps there’s advantages to both methods - personally I tend to mix when I see a good offer I take it! just make sure if you do this and buy from the dash you turn auto renewal off!
And you also sometimes get free trial cards inside new games and MS also sometimes have free gold weekends so silver members can play online for the weekend for free.
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