Wednesday, June 13, 2012

A Lawyer Looks at Online Banking

Still Writing Out Checks By Hand?

Old-fashioned check-writing is quickly going the way of the vinyl record and the corded telephone.
Online banking and automatic payments have quietly reduced the use of hand written checks to the point of actually contributing to reductions at the gargantuan U.S. Post Office.

Online bill payment has some definite advantages:

1. No need to order expensive checks.
2. Never run out of checks.
3. No need to stand in line to buy postage.
4. No need to keep envelopes nearby.
5. Never run out of stamps.
6. Save .45 cents on each bill by not using postage.
7. Less paper used means less environmental impacts.
8. If your paper bill gets lost, automatic payments still occur.
9. No need to pay up bills ahead when planning to travel.
10. Online privacy is more secure than the information on each paper check.
11. You can use a credit card or other means to earn perks, points and miles.
12. The first of the month loses its significance as the time to pay bills.

With all these advantages, why are some people still writing checks?
Usually, those born before the moon shot are a bit more dubious about technology--or anything new--for that matter.  There is a healthy skepticism of computers and that can be a well-founded concern.  Some places, like your local church, may not accept electronic payments. However, online checking will mail them a paper check and you don’t even pay the postage.

There is always a worry about online privacy. We all hear the advertisements about identity theft and leaked passwords. The good news is that you are not held liable for identity theft--or for any charges you--or an authorized party did not agree to. It can be a hassle, but identity theft is usually just that.

There are even arguments in favor of really old-fashioned cash over checks. If you go to the store to buy an $89.00 item with nothing but a $100.00 bill in your pocket, you have killed any attempt at impulse buying.

There are also arguments that we should use credit cards exclusively.  You get points, miles and perks for money you would spend anyway.  And, record keeping is much easier when tax time rolls around. However, Dave Ramsey and other experts point out that we all tend to spend much more if we are “charging” it. Additionally, the credit card companies know that, over time, you will get behind and use their profit center: interest.

In the end, I have grown to like online banking a lot.  What do you use and why? Follow, Comment & Share