The simple answer is that bankers believe online billpay users remain customers for more years than customers who don’t use online billpay. And an extra year of your business is worth providing you with free online billpay.

Look at the math: Let’s estimate the average cost (to the bank) to offer you billpay at $0.50 per transaction and the average customer sends out 8 bills per month (I know this from banks). That means it costs the bank about $4 per month or $48 per year to offer you free online billpay. So if their assumption that you’ll stick around longer is correct, it’s totally worth offering online billpay for free. Why? The average checking account customer generates about $300 in revenue (fees, $ on your deposits, etc.) per year and new customers are expensive to acquire (~$200 per).

If you don’t want to be tied down to your bank or credit union, don’t use online billpay, set-up automatic payments or have any direct deposits. But if you’re like the rest of us, before you jump at the $100 offer, make sure the bank is convenient and that the checking account you’re opening includes all the features you’ll need.

You can check out FindABetterBank to compare features and fees for banks in your area.

Brush Up: Finance Lit 102

For some tips on financial literacy, why not brush up on some common interest rate terms to help you navigate the world of savings and loans? Jim at Bargaineering explains the difference between APR and APY in this quick video, part of his Bargaineering VideoCast series.
 

(Relatively) New Subject: Rewards Checking Accounts

Looking to put your money in a safe place but still earn interest? J.D. at Get Rich Slowly writes a great article as part of his Financial Literacy Compendium about rewards checking accounts, which earn high interest (think 4% or more!). These accounts are designed for people who use their debt card often and receive e-statements instead of paper statements (as these are two common requirements to earn the high interest rate). Check out J.D.’s article for a great introduction to rewards checking accounts and browse High Yield Checking Deals for rewards accounts in your neck of the woods.
 

Old Subject Gone New: Credit Cards

Steve Sildon from Credit Card Assist guest writes for The Digerati Life about how credit cards are changing. The credit crisis has hit the common credit card, making “0% APR” introductory periods more difficult to come by and airline miles more difficult to earn. Anyone who owns a credit card (or four!) should find his article, “Your Credit Card Benefits and Features Are Changing Rapidly”, a huge help.
 

Parting Words: A Penny Saved Is…

…EASY to come by with another post from Get Rich Slowly titled, “How To Find Great Deals on Vacation Travel”. This article covers all of the major and many of the minor travel ticket sites around the net that his Twitter followers suggested. You just might find that the summer vacation you were hoping for is possible (A round trip from JFK to San Francisco can be only $48? Are you serious?)