Pros and Cons of Paperless Satements
Posted by: Staff Writer | Jul 21,2007
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Should you stop receiving statements from your bank and other financial institutions by mail and instead review your statements online? Certainly the financial institutions are pushing customers to go that way, mostly because it will save the companies millions of dollars and printing and postage. But is going paperless best for you? Consider some of these pros and cons of paperless billing.
Pro Number One - The EnvironmentAccept your statements electronically will have an impact on the environment. By not using paper you might be saving trees, certainly you're not contributing to the landfill problems by generating garbage, and you could even calculate some fossil fuel savings since no postal delivery service is necessary.
Pro Number Two - Fewer Boxes of FilesThe amount of paperwork owning just several mutual funds in a retirement account can generate is daunting enough, but then add in those bank and credit statements coming each month and you end up with a closet full of file boxes. Saving all those old statements takes up room and might even be vulnerable to loss in the case of a flood or fire.
Pro Number Three -- SpeedIf speed is an issue, unquestionably you will receive statements by email much faster than by snail mail. This will help avoid defaults when the bill is lost in the mail.
Pro Number Four - Save MoneySome banks and financial firms have begun to offer their customers reduced or negated account maintenance fees if they agree to receive paperless statements.
Sounds pretty good, but also consider the cons.
Con Number One - How Safe and Dependable is Email?It's debatable if email is safer than snail mail since they are both vulnerable. However, it is unquestionable that authorities have found criminals with big data warehouses filled with information stolen from the net by hackers, spyware or "phishing" attacks.
Also, email statements can possibly be mistaken by spam guards to be spam and discarded. If you have a job or lifestyle that receives hundreds of emails weekly, it's also possible to lose the statements among the throng.
Con Number Two - Autopilot BlindnessWhen you set up your life to take care of itself electronically, you can be a victim of autopilot blindness. This is when you stop checking your statements yourself, allowing your software to tend to the emails automatically.
Not checking your statements is reckless and can lead to fees being deducted out of your account each month or even worse. If someone has tapped into your credit, the sooner you notice it, the better.
Con Number Three - How Long Are They Stored?You need to save your statements primarily for your tax records. The IRS says you need to keep statements for three years, but they can go back six years into your history if they feel your tax delinquency is flagrant. Also you must maintain records of the cost basis of stocks and bonds for three years after you sell them.
The problem is banks and other financial institutions are not storing electronic information that long. Some banks only keep copies of your canceled checks for a year. But if you needed a copy of one to prove a deduction to the IRS, you wouldn't have it to show because you went paperless.
Paperless Statements: In Conclusion
So while there are some good reasons to go paperless, if the banking industry really wants us to move toward electronic mail, they need to step up the services they offer to make it worthwhile.
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