On the money

NEW YORK -- With the price of a first-class stamp up to 37 cents, many consumers are taking a fresh look at reducing their mailing costs by paying their bills electronically.

The average American pays about a dozen bills a month, so a postage increase of 3 cents per letter isn't going to break the bank. Still, experts say, it might be the final nudge for many to shift to e-payment options.

A phone survey conducted for the Direct Marketing Association found that more than one-third of respondents indicated they would look for bill paying alternatives to first class mail. Fully 42 percent of those 25 to 34 said they would seek alternatives.

William Nelson, executive vice president of NACHA-The Electronic Payments Association, said there has been tremendous growth in the use of electronic payment methods since last year, when the grounding of jets after the Sept. 11 terror attacks and the anthrax scares interfered with mail delivery.

"People saw that the electronic stuff kept working" through the crises, Nelson said. "They're finding it's safe, cheaper than mail -- and it saves trees."

There are a number of e-bill pay alternatives.

The oldest and still highly popular electronic option is "direct payment." It's the reverse of "direct deposit," which millions of Americans use to get their pay checks and Social Security checks safely into their checking accounts.

With direct payment, consumers can instruct a company to debit their bank account monthly for the amount they owe. The system is especially good for bills that are the same every month, like mortgage payments, insurance premiums or level-payment utility plans.

Another increasingly popular option is going each month to the Web site of a company like a telephone company or a credit card issuer and paying online by authorizing a transfer from a checking account.

The greatest growth, however, has been in online bill paying, either though a specialty site like www.paymybills.com or via a commercial bank, savings bank or credit union. Even the U.S. Postal Service has an e-bill paying site at www.usps.com.

On the Net:

www.usps.gov

www.the-dma.org

www.nacha.org

www.bankofamerica.com

www.checkfree.com