Autopay, is it Good or Bad? Debt Free Journey Debt Snowball

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“Wish you had some extra cash well yeah. Hey there cool kid. I m debt debt free d. If you re one of my subscribers welcome back to my channel.

You are not yet one of my subscribers please consider subscribing by hitting that subscribe button in the corner or the button down below so auto pay. What is it i don t pay is essentially an agreement you make with your creditor where they take out the payment. That s due each month. So do i think this is good or bad and of course.

If your payment is due on a quarterly basis. They ll take it out then. But normally on a monthly basis. They ll go ahead and take the payment without you having to schedule.

It so. This is just my take on whether that s a good thing or a bad thing so auto pay definitely has some good benefits and don t take my word for it i m gonna pick on discover a little bit because i think they spell it out pretty good. And if you haven t seen my up interest video check it out i ll link it above. If you have seen that video.

You know exactly what i m talking about i like to pick on discoverer cuz. They pick on me anyway. They sent me this email in august of 2017. And it says d.

Wish you had some extra cash well. Yeah enroll. In direct pay and get up to 40. Direct pay is the free automatic recurring payment tool that helps card members avoid missed payments and potential late fees.

And if you sign up now you ll get up to 40 dollars in the form of a statement credit all right here s what direct pay can do for you peace of mind your discover bill will be paid on time every. Time planning power. Avoid missed payments and late fees..


Okay. So there right auto pay does help with those things. If you re in the habit of unfortunately. Missing your ments or and also getting late fees.

Because you re missing your payments. Auto pay is a great feature as long as the money is in there. And that s key as long as the money is in your account. When they go to pull that payment there you go automatically you make your payment.

So you don t miss a payment and you don t get a late fee because you missed your payment. So that s great those are great things and if you have a lot of debts that you re having to pay. And it s hard to keep track of them you know auto pay is a great feature you ll want to make sure the minimum payment is paid every time on time. I ll add to that one great feature of auto pay is that in most cases.

When you sign up for auto pay you ll enroll in like an electronic statement. And that way you will get all of your statements online and that is a good thing. Because it helps with eliminating a lot of paper waste. So that s a great thing right i m i recycle endlessly.

I recycle more than i throw away so i m definitely a proponent for electronic statements. However there are some not so good things about auto pay as well and the list goes on for the good things. But on the flip side. This is just my opinion of what auto pay is not so great i feel like with auto pay you have the tendency to go on autopilot like you tend to go on cruise control with your debts.

So i think this is so interesting. I was preparing for this video. And i got a bill from td and inside they had this little leaflet that says one less to do pay your credit card bill on time every time without a second thought. And that s what it says.

Without a second thought. And i thought oh no and that is one of the reasons. Why i think auto pay isn t that great it s due to the fact that sometimes we go on autopilot with these days..


You know there can be a lot of them. And it s much easier to consider the 100 payment you have to make or the 50 payment you have to make rather than a balance of. 2000 or 4500. Right you kind of consider it as you know that s just something that s already taken care of and sometimes i feel like it doesn t provide you with like the magnitude of what your debt should be and obviously you know this isn t the next debt in your snowball.

You don t need to be super concerned about it. However if you re like me i like to see the big picture. I like to chip away at the next one in line. But i like to see the big picture.

I know in this version of the debt snowball. You re not really taking into account. How much interest you re being charged or are paying. But for me.

It s in my peripheral vision and i m gonna pay some attention to it i just believe that you normally have the tendency to go on autopilot. It s a lot easier to think of discover as a 100. Payment then a 4500. Balance also how many of us go into our electronic statements online.

I know whenever i get my updated balances through my mint app. I can go in there. And see that the balance didn t like astronomically jump up and make me think someone s stolen my identity or anything like that and so i think that i m on the right track. But if it wasn t for a paper statement to see you know wow if i don t pay this any sooner than the minimum payment that i m being charged every month.

Then look at the magnitude of this and i won t go into a lot of this again you ll want to check out my interest. I hate interest video. So you can see a lot of the details. I m going into on here.

But in the statement itself it says that if i only make the minimum something that my debt snowball tells me will take 13 months. This statement says we ll take 19. Years only making the minimum payment and the balance is only about 4500..


Which that s a lot. But compare it to the fact that if i only made the minimum payment over 19 years i would be charged 14000. Like behind the balance and the interest that would be charged i d end up paying 14000. And so those are the pieces of information that you don t get from just automatically making a payment and i understand the 4000 incentive that was really an incentive to me my student loans were on auto pay and i got a point to five percent reduction in interest rates for those loans.

If i signed up for auto pay. And it definitely has its conveniences. But because i feel the negativity of not kind of getting an opportunity to look at the total debt and the implications of hanging on to that debt and just making that 100 dollar payment or that 50 payment. It can sometimes outweigh the positivity of it of course you ll want to make it on time and then you know just work your debt.

Snowball and when you get to this debt knock. It out. But in the meantime check in on these debts every once in a while just to see exactly what s happening with them. I know at least for me.

It s motivation for getting to this discovered it so i can get it knocked all the way out so. I also wanted to share with you something i do in addition to having this discover account on autopay and it was also something i did with my student loans as well and that is to align. It with my pay periods. So that i can even pay earlier than the scheduled date.

So if you see my plan with me i like to plan out my paydays and my bills do so then i can see between the paydays. What bills occur and what bills are due in those paydays and so that helps me because if you re anything like me. I like to get paid and schedule. All of my bills to come out as close to my pay period as possible on the day.

I get paid. If not right after the day. After or you know a couple business days after getting paid. I like to have all my bills paid so then for the rest of those that two week period.

The rest of those two weeks. I can see what s in my account. And know that that is for groceries and gas and i m not waiting for another bill to come out you may like to have bills linger and just pay them a couple of days before and that s fine too..


But for me i like to pay everything get that money out of my account. And know that what s left is what i can use for groceries and gas. And if i can save a little bit of that money to put more towards my next smallest debt. My dad snowball that s even greater.

I love that so in my planner. I look at when i get paid and then when that discover is due and so they re gonna take it out automatically on the day. We scheduled without fail they ll take the money and the money s in there okay. But normally i will go ahead and pay the discovere anyway so i m going to show you an example of my planner where on one friday.

I get paid and then the following friday. The discover is due but close to my pay day. I go ahead and pay that discover and so what you ll want to do if you decide to do it. This way is first off make sure that the payment you re making is going to satisfy the payment that they ll withdraw on the day you agree to so you don t want to make an additional payment you just want to make sure it satisfies that okay hopefully that makes sense feel free to let me know if you have any questions about that.

But you don t want to make an additional payment you ll just want to make sure it satisfies your upcoming payment also it actually helps to save a little bit of interest and so if you re not considering interest this won t be of any value to you. But i ll try to explain this in a way that makes the most sense and essentially your interest charge is based on your average daily balance of your debt of your account. When you pay anything early then your average daily balance becomes less earlier and so it helps to save you just a little bit of interest and so even though interest isn t the biggest factor in this debt snowball of mine. I really like the fact that i m saving some interest and especially or discover.

So that s just one tip that i have even if you have something on autopay go ahead and pay early if it satisfies that payment anyway. And it s a way of using auto pay definitely to make sure you avoid potential fees and make sure you always make your payment s. But then you re also taking a little control in paying it a little bit earlier. So that it s already checked off your list.

It s already taken care of and maybe even saving you a little bit of interest as well so let me know what you think do you like idle pay. Do you have a lot of bills set up on auto pay let me know in the comments also how do you like your pay periods. And bill s structure do you like to pay everything as close to your payday like i do or do you tend to like to have some debts linger and you pay them a little along the way in your pay periods. Feel free to let me know in the comments.

If you like this video make sure to give it a thumbs up if you re not already one of my subscribers make sure to subscribe thanks for watching you have a great day ” ..

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