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May 2009
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Save stamps with electronic banking

10:59 AM Mon, May 11, 2009 |
Posted by: Walt Zwirko
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 The U.S. Postal Service today raised the price of a first class stamp by two cents, from 42 to 44 cents.

While traditional letter-writing has given way to phone calls, e-mail and instant messaging, a lot of you probably still pay your bills by popping a check into an envelope, slapping on a stamp and dropping it into a mailbox.

My suggestion: Try the electronic bill-pay services now offered by most banks.

In many cases, the service is entirely free to the customer. Cost-cutting banks have long realized that physically processing a check is a burdensome exercise in bureaucracy. In addition to the cost of the check and postage, some banks even charge extra to physically return canceled checks.

So if you haven’t already, what better moment than this to try paying your bills by computer?

Many merchants, utility companies and credit card firms will even cut down on the clutter in your mailbox by offering to deliver your statements electronically. I choose to continue getting bills in the physical mail for record-keeping purposes. But I can only think of one bill in the past year that I’ve had to pay by actually writing a check and mailing it.

There’s no need for you to switch away from checks initially; first go to your bank’s Web site to see what it offers. Pay close attention to any fees or limitations for their online service — particularly the amount of time it will take to deliver funds to your creditors. My bank offers one-day service to nearly all major merchants by transferring payments electronically. It still sends a physical check to my water company, but the bank is buying the stamp (and licking it), not me.

Then schedule one or two bills to be paid electronically to see how it works; call your bank if you have any questions, and check whether using a competing bank might have advantages.

Some people will argue that paying bills by mail offers more control over when the check is delivered, but I think just the opposite is true. With electronic banking, you can sit down at your keyboard just once or twice a month and schedule each payment individually for dispatch at times that are advantageous to your monthly cash flow. You may even be able to download a record of your transactions that can be saved to a spreadsheet or to a financial software package like Quicken or Microsoft Money.

“Pay your bills this way and avoid one of the most common reasons bills are paid late: forgetfulness,” says the American Bankers Association, which estimates that you can save more than $400 a year in postage and late payment penalties by making the switch.

E-mail askwalt@wfaa.com




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