10 Pros and Cons of Paperless Billing

Viewing monthly bills online is better for the planet, but is it the best choice for you?

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Photo: Tooga / Getty Images

By Emma Grady

Still paying and receiving monthly bills via snail mail? You may have noticed an option on your statement that – usually by checking a box – automatically enrolls you in paperless billing. If your household has already opted to receive and process billing information online, rather than in a paper format, you're saving 171 pounds of greenhouse gases, 63 gallons of water, and 4.5 gallons of gasoline annually, according to Pay It Green, a coalition of financial institutions and businesses promoting paperless billing. But, it's still a good idea to look at the pros and cons to determine if the paper-free option is right for you.

Pros of Paperless Billing

1. You Can Save Time and Money
No more adding "stamps" or "envelopes" to your grocery list: by paying bills virtually, you forgo postage fees – that's $30 in annual savings on stamps alone, on an average of 4 monthly bills. You'll save precious time, too: according to Pay It Green, the average consumer saves 2.5 minutes per bill.

2. You Can Qualify for Prizes
Companies save money when you go paperless, which is why some discount $1 per bill for customers that sign up. (In New York, Con Ed allows customers to donate that $1 to the charity of their choice.) Greater incentives abound, too. Verizon, for instance, recently launched a Great Paper Escape Sweepstakes that will award one lucky customer $10,000 if they go for the greener option by Dec. 31. Plus, they're giving out daily rewards, including a $50 "Verizon Perks" gift card and a Trek Eco Urban bicycle.

3. You Can Receive Online Payment Reminders
Curious about monthly usage on an electric bill? You'll appreciate paperless billing's instant access to monthly statements and e-mail reminders from service providers when payments are due. Check with your bank to see if you can organize your e-bills in one place, making it easier to keep track of all of your finances. Increasingly, private companies like Manilla offer services like this, too, to make it easier to keep track of paperless bills.

4. You Can Save Paper and Reduce Clutter
Paper bills pile up, creating clutter. You can reduce personal paper use by making the switch to e-bills. Do you file paper bills for record-keeping purposes? You can download and save them to your computer – and even print bills, if necessary. (Just don't forget to back up your hard drive!) By paying online, particularly if you pay through your bank, you create an electronic trail that is easy to follow.

5. You Can Simplify Recurring Payments
Paperless billing's kissing cousin automatic payment allows you to deduct a bill's balance from a personal bank account, and is a convenient way to take care of recurring bills, like mortgages and car payments. You won't find yourself spending the money on other purchases, because it's already earmarked for its intended purpose – and, you'll avoid piles of paper from each identical monthly bill.

6. You Can Sync Your Payments with Budget Software
If you use software to track your family budget, you can usually sync it with billers or banks to streamline the process, allowing you to save time and avoid the errors that can come from inputting data.

Cons of Paperless Billing

1. You Might Miss a Mistake on a Bill and Risk Overpaying
With the flood of information we're faced with online, it can be easy to pay an e-bill without reading it as closely as you might read a paper bill. You might miss a mistake and overpay. (On the other hand, if you're the type of person who creates piles of mail to sort later, and then forget to sort them, an e-bill might save you from late charges, since it's often easier to file electronic bills, and to set e-mail or text alerts as reminders when they're due.)

2. You Might Not Trust Electronic Storage
If you're meticulous about keeping files, giving up your hanging folders and filing cabinet might seem scary. Right now, billers, banks and third party bill-paying services are working to streamline data storage and retrieval. But the sophisticated syncing that allows banks to retrieve your latest phone bill, so you can keep billing records in one place online, is only available for big national companies, not necessarily your local water and sewer bill. And your biller or bank may only save your bill for a few months (you should ask, so you know before you sign up). Finally, if you don't trust your data to a distant database, electronic billing may not be for you.

3. Your Cluttered E-mail Account Just Got More Cluttered
Your mailbox is less cluttered, but what about your inbox? If you're the type of person who checks e-mail infrequently – or checks so frequently that you move on to the next message before dealing with the first – then paperless billing could be a problem. Statements, payment due reminders and other information will flow into your inbox, making it easy to track – if your e-mail inbox is organized.

4. You Might Change E-mail Addresses
If you change e-mail addresses, you'll have to update your billers – just as you would if you change mailing addresses. But you may forget to update a biller, particularly for bills you receive irregularly, and miss a statement, making you vulnerable to late fees and penalties.

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