Tuesday, January 27, 2009

Online Banking

Early in college I learned some very difficult financial lessons regarding late fees. While I considered myself knowledgeable regarding financial transactions I consistently found myself paying late fees for every bill around. I adopted early to online bill payments as a means of avoiding these sapping charges.

Currently the only bill I manually pay is the monthly transfer of funds from Checking to pay my credit card (a transaction I like to oversee). Mortgage, car insurance, cell phones, student loans, etc. all manage themselves. Here are a few benefits of online bill pay for my personal life:
  1. Avoid Fees - Many services charge $15-$30 for delayed payments
  2. Reduce Stress - How much energy do you devote to thinking when bills are due? For what purpose? Assuming your are financially solvent are you really not going to pay your electric bill?
  3. Maximize Interest- The time value of money is a simple concept: hold on to your money for as long as possible to maximize your return given a positive interest rate. Online payments allow you to set a payment date as close as possible to the due date leaving your funds earning interest until the last possible second.
  4. Access - Information is only as your ability to access it.
  5. Reduce clutter - You don't really need to save that electric bill, why clutter your mailbox? I don't have a home office and living in the city I certainly don't have room for boxes of bills and used checks.
I highly recommend my bank for anyone interested in online banking. I have also read very positive reviews of PNC's Virtual Wallet.

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