The Pros and Cons of Paperless Billing

By: Kristina Hall, Quizzle.com

Many industries have recently switched to the "going green" ideals of operating on a paperless system. According to PayItGreen.com, if 20% of American households switched from paper to electronic bills, statements and payments each year, the collective impact would:

• Save 150,939,615 pounds of paper
• Save 1,811,275 trees
• Avoid producing almost 2 million tons of greenhouse gases
• Avoid creating over a billion gallons of waste-water during paper production
• Avoid using over 100 million gallons of gas to mail payments

Those numbers are convincing enough to make any industry consider the move to electronic statements. For example, take my recent experiences with doctors: One office had me fill out a new patient profile survey online before my first appointment. Another office had gone entirely paperless in the examination room-no charts, only laptops-and even asked if I'd be willing to receive my test results online by setting up an account with their patient manager website. Lastly, in order to receive a rebate on my prescription purchase, I had to use a promotion code and fill out the required forms online.

Personally, I think the movement to reduce paper usage is great, however, it comes with some consequences. In the first two examples above, I mentioned the passing of information through the Internet. Both instances required setting up a username and password to create an account. I may be the only one, but I'm starting to have trouble keeping all of my various online account usernames and passwords straight!

A lot of credit card companies are offering the option to receive statements online, rather than in the mail. Many customers view this as a convenience, but is it truly a helpful alternative?

The Pros of Paperless Billing

Environmentally Friendly

The first and most obvious reason to choose online statements is the reduction of paper usage. We're all encouraged to do our parts in helping the environment and reducing our contribution to the waste we produce a year. Switching over to electronic statements (or e-statements) is an easy way to minimize the footprints we're leaving behind.

Online Bill Pay

This is another convenient service that a lot of banks have added as a benefit for customers. Receiving your bills online makes the process of paying your bills online much easier. Rather than sitting in front of your computer with a stack of paperwork, you can check your card balances online and then instantly sign into your bank to make the payment.

Information Accessible Anywhere

Receiving your bills via the Internet gives you the ability to check your monthly statements wherever you are. This means if you're out of town for work or on a vacation, you can easily stay on top of your bills and payments so you don't miss any that are due while you're away.

While you're in the process of checking your monthly statements, it's not a bad idea to double-check that the right information is being reported to the credit bureaus. Find out for sure at Quizzle.com, where you can get a free credit report and free credit score via the Internet, plus dispute any inaccuracies you might find.

The Cons

Passwords

With increased security measures that websites are taking these days, passwords are required to be more complex and less detectable. This helps ensure your security on the website, but can be a pain when it comes to memory recall. A good general practice is to have several passwords for different types of accounts, in addition to changing them a few times a year. For those of us who have a hard enough time trying to remember all of our different usernames, the iron-gate passwords we create for our credit card information may be hard to remember (especially if you aren't frequently signing-in to your account).

Some websites even require you to do something unique and out of the ordinary to your password, like "must contain at least one number inside the word." Even if you use one of your typical passwords, if you don't note these specific requirements, you could be locked out from viewing your bill. This type of restriction is only possible on the Internet. Can you imagine your mailman asking for the "secret word" before delivering your statement to your mailbox?

Updating Account Information

Just as you would let your credit card company know when you've moved and need to change your billing mailing address, you need to let them know when you change your email address. There are multiple reasons why you would change email services (changing your Internet provider, a new job, your old address is taken over by spam mail, etc.), so this is important to do before you lose access to your old email account. It is also common for people to have several different email addresses; this can cause confusion when trying to access your accounts if you're signing-up for multiple services with different email addresses.

If you forget to do so, you could lose access to your account, or you may need to go through a verification process which could stand as a timely road block when trying to access your newest statement.

Less Frequently Used Cards

I opened a retail credit card a few years ago and have left the account basically inactive, until I used it last month. Now even though I only used the card to purchase one item, I made sure to pay off the balance the next time I went in the store. However, if I hadn't done this, I would have been waiting a long time to see my bill in the mail-scratch that, I would have been waiting indefinitely for my bill to come. I had forgotten that two years ago I opted into electronic statements.

Not receiving a bill in the mail for the cards you rarely use could cause you to forget to pay the bill. This could result in a number of negative effects, including being late on your payments, which is a major ding to your credit score.

What this really comes down to is deciding which method will help you more-if you're well-organized and can easily keep track of all of your accounts, online statements are a great way to manage your bills anywhere, anytime. However, if you like having a hard copy of your bills, or have created a routine around the old school practice of receiving your statement in the mail and immediately sending off the check, then switching over to the paperless trend may not be for you.

Looking for more tips and tidbits about your home, money and credit? The Quizzle Blog's got you covered:

• 3 Major Money Mistakes that Can Cost You
• A Free Credit Report and Score, You Say? Okay, What's the Catch?
• 10 Common Myths about Your Credit Report and Score
• How NOT to Improve Your Credit Score
• 7 Things about Money I Wish I Knew in My 20s

Kristina Hall is a Client Advocate for Quizzle, an online service that provides free and easy ways to manage your home, money, and credit -- all in one spot. She is a young money manager who is learning the ropes through first-hand experiences and writes about her adventures on the Quizzle Blog in the hopes of helping others better prepare their personal finances.