Wednesday, November 09, 2005

Going Paperless

Here's something environmentalists and business efficiency experts can get together on: NO MORE PAPER BILLS.

Not having paper bills come in each month (or every three or six months) works wonders for me especially since I move twice a year. If you tell the post office to begin forwarding your mail, you'll be happy to get 10% to 15% of it at your new address. On top of that, they probably won't start forwarding it until three weeks after you ask them to start. And finally, they won't stop forwarding your email until three weeks after you ask them to stop.

No more paper statements from my: (1) bank, (2) credit card companies, (3) cell phone provider, (4) power company, (5) television provider, (6) auto insurance provider, (6) ISP, (7) local telephone company, and (8) stock broker. Combine this with a free online bill paying service from virtually any bank in the country, and you've got an efficient way to keep track of your expenses. Here are some benefits:
  1. Portability: If I am out of town and a bill arrives, all I need is an Internet connection to stay up to date
  2. Free rewards points up the yin-yang. The best part of paying your bills online is that you often get points just for signing up (because it is cheaper for your company to send out an email than a paper statement). And, if you pay your bills with a credit card (and then just pay the credit card at the end of the month), you are eligible for 1% to 3% of your money back in some type of rewards points.
  3. Boost your credit score. If you put things on your credit card on purpose, and just pay them off each month on time, you're on your way to a solid credit history.
  4. More time to pay. Let's say your TV bill is due on November 20. If you pay the bill online using your credit card on November 18, you probably won't see your credit card statement for another few weeks. Therefore, you've just bought yourself an extension without paying any interest whatsoever.
  5. No more stamps or envelopes. I would venture to say that stamps alone cost an average family 4 dollars a month
  6. Instant access to your history at every site. This means that your uncle can throw out his 7 year stockpile of useless receipts. If you need something, print it out. Also, you can set up daily alerts so that whenever your checking account or credit card is used, you will be the first to know.
  7. No more checks. You don't have to waste paper checks anymore. If you pay online, your bank either sends a paper check by itself or will transfer your funds electronically. This means no more "check printing" charges.
  8. Time. You know how much time it takes to pay a paper bill? Sit down, write everything down, write a check, fill in all the account information, stuff it, stamp it, then let it sit on the table for a few days when you get around to sending it.
I will say, however, that there are a few drawbacks. The first is security. There are plenty of stories of people getting scammed on the internet or getting their financial information intercepted through an insecure internet connection. But I feel like this is what fraud protection is for. Even if I don't pay for protection, if you complain to your credit card company or bank that there is a charge on there that you didn't make, they'll remove it. Plus, I don't really see checks being any safer a medium.

The other drawback is that many people think online bill paying and automatic bill paying are the same thing. They are not. You can have the company automatically deduct money from your account so you don't have to worry about paying bills at all, but I think this leaves people susceptible to being swindled. I know Verizon Wireless habitually used to charge people an extra few cents for no reason (35 million customers and stealing a penny from each of them equals big bucks). You really think someone with auto bill pay is going to notice the difference between $39.87 and $39.89? Not a chance. The fix? Just get your bill online, but don't sign up to have it paid automatically.

If you don't want to go all the way, try paperless bills with a few of your monthly bills. But I promise you'll see why all of us younger whipper-snappers have faith in electronic commerce.

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