Deciding to go paperless
With the rising popularity of online bill paying, it’s easier than ever for consumers to go paperless when it comes to their finances. No longer do they have to write checks, mail payments to their credit card companies or ever see a paper statement from their mortgage lender.
There are many benefits to going paperless. But there are drawbacks, too.
“One gigantic pro to going paperless is that people can have all of their financial information stored in the same place,” said Joel Ohman, a Florida-based certified financial planner and founder of CreditCardChaser.com. “But one gigantic con to going paperless with one’s finances is that people have all of their financial information stored in one place, allowing that same easy access to those with nefarious purposes as it does to the rightful owners.”
Here’s a quick rundown of the pros and cons of going paperless.
1. Preventing identity theft
Financial experts have long said that sending important financial documents through the mail is a risk. Identity thieves can easily intercept these mailings. By paying bills electronically, consumers thwart what is still the most common way for scammers to steal information.
2. Less clutter
With more consumers working from home offices, going paperless can help reduce mess and clutter. By paying bills electronically, consumers won’t have to worry about having their home offices cluttered with dozens of credit card, mortgage, auto loan and other financial statements.
3. Better record keeping
It’s easy for busy individuals to lose track of what bills they paid, when they paid them and how much they paid each month. Tracking this information can prove challenging. With electronic bill paying, consumers can simply log on to secure websites for a recap of their recent payments.
1. Security concerns
People who pay all their bills electronically generally store their important financial information in one place: their home computer. This can make it easier for savvy thieves to obtain this information.
2. Data loss
If consumers don’t adequately back up their financial information, they run the risk of losing it all if their computer’s hard drive crashes. That’s why technology experts constantly remind consumers to save backup copies of their most important information.
3. The hassle of switching
Consumers who want to switch banks will have to make lots of phone calls to their financial institutions or visits to these companies’ websites to make sure they are connected to the new bank. If consumers forget to do this, their bills might not be paid on time as lenders and credit card companies try to access funds from their previous banks.
GateHouse News Service