Monday, August 17, 1998
The University Daily Kansan
Section D · Page 15
Students needing new wheels have several options with local banks
By Kristi Hartloy
Kansan staff writer
Most students at the University of Kansas need reliable transportation. A new automobile may be the answer.
With tuition, living and academic expenses, many students may have to find financing options before purchasing a car.
The general principles of lending look at credit, capacity and collateral.
"It's important that you have credit," said Janice Toebben, senior vice president at Mercantile Bank, 900 Massachusetts St.
A lot of students may not have established credit, so lenders next look at capacity.
> "What we like to look at is someone who has been in a job for two months with a stream of income that's consistent." Toebben said.
The third component is collateral, something of value put up for the loan, such as a certificate of deposit or a car with some value, she said.
Occasionally, when someone does not have all three components, a lender might consider a co-borrower. A co-borrower puts up their own credit, collateral or capacity for the loan, Toebben said.
A benefit Mercantile Bank offers is a reduced interest rate for automatic payment, she said. With automatic payment, the monthly bill is deducted directly from a patron's bank account.
For students who need extra money for school and who have paid off a substantial amount on an existing auto loan, Douglas County Bank, 300 W. Ninth St., can refinance the loan.
"We want to build a relationship with the student as a long-term customer. We came up with this program for them."
Doug Saville Commerce Bank branch manager
"it's good collateral for a loan," said Gina Baun,
senior vice president of Douglas County Bank.
Consumers may opt for the cash rebate many auto dealers offer and go to their own bank for the loan. Baun said that taking this option generally would be better for students.
Commerce Bank, 955 Iowa St., offers a young professional car loan program.
"We've done a lot of these, and it works great for graduating seniors," said Doug Saville, branch manager.
The program subtracts one-fourth of a percent off the current interest rate for Commerce customers buying new cars, and their payments are automatically deducted from their accounts.
The first payment is due 90 days from approval, and there are no origination fees.
"We want to build a relationship with the student as a long-term customer," Saville said. "We came up with this program for them."
Saville said that students needed to provide a transcript showing a grade point average of 2.5 or higher, a proof of employment commitment and an acceptance letter.
Capitol Federal Savings, 1025 Iowa St., offers auto loan pre-aproval.
Mike Cast, vice president of consumer lending,
said that with pre-approval, a customer could know
how much they could spend before car shopping.
Auto loans can be processed and closed on weekends at the Super Target branch of the bank, 32nd and Iowa streets.
"This is convenient because many people shop for automobiles during weekends." Cast said.
UMB Bank, 1441 Wakarusa Dr., also offers weekend loan approval.
Students checkout accounts
Local banks offer basics: checking savings, ATM
The tuition is paid; the books are bought. It is time to find a bank for the rest of your money.
By Kristi Hartley
Kansas staff writer
Kansan staff writer
"The dealerships fax applications to the Kansas City, Mo., UMB offices," said Teresa Smith, assistant vice president and facility manager.
Lawrence banks all feature basic checking and savings account services as well as 24-hour customer service.
Commerco Bank, 955 Iowa St.
Commerce Bank offers students the KU Checking Account in conjunction with the new smart card, said Doug Saville, banking center manager.
Saville said that an article in The University Daily Kansan stated that people could possibly hack into the microchip in smart cards.
"I wanted to point out that the magnetic strip of the card is where the bank information is stored," Saville said.
A personal identification number is assigned by the bank for use of the banking part of the smart card. If someone finds a smart card, he or she will not be able to hack in to it on a computer, he said.
The KU checking account does not have a monthly service charge, a minimum balance or a limit to the number of checks that are written.
"ATM withdrawals are free, as long as you can use a Commerce machine to make your withdrawals." Savile said. "If you use another bank's machine, there's a $1.25 charge per transaction."
Students who want a debit card will
have to opt for the Commerce Student Checking Account, Saville said. The bank offers the Visa Check Card for this account that deducts purchases directly from a customer's checking account. A debit card is not offered through the KU checking account.
To open a student checking account, there is a $100 minimum deposit. The account has no minimum balance requirements and no monthly service charges.
service is what Mercantile Bank wants to provide to its customers, said Janice Toebben, senior vice president.
"We're really trying to be available to the students at the times that are convenient to them." Toebben said.
Mercantile Bank offers students a budget account designed for low activity. The user can write up to eight checks per month at no charge. Most transactions of this account are with the Visa Check Card, which also works at ATMs, she said.
The interest checking account is free if a $1,000 balance is maintained. This account features earning interest, unlimited check writing, free Visa Check Card and ATM usage.
Mercantile Bank has a Web site that makes people to open new accounts.
Douglas County Bank has a student checking account that can be opened with a minimum of $50. This account features no minimum balance with a $5 monthly account fee, said Gina Baum, senior vice president.
When students apply for a debit card with the student account, they also can apply for a pre-approved line of credit, called Chapq-a-check.
Baun said that if more than $300 is kept in the account, the $5 fee is waived.
Charg-a-check is used for overdraft protection on checking accounts, Baun said.
Capitol Federal Savings, 1025 Iowa St.
Capitol Federal Savings offers its Cool Blue checking account to students.
The account has no monthly service fees and no minimum balance and can be opened with $100, said Barbara Carswell, first vice president.
Customers can access their accounts from 7 a.m. to 11 p.m. through the call center. The Capitol Federal branch at Super Target is open Saturdays and Sundays, Carswell said.
With this account, the customer must deposit a minimum of $100 and maintain a minimum of $50 to earn interest.
Students with more money can open the Genuine Blue checking account.
"We have quite a few students who go with the interest-bearing account," Carswell said.
There is no monthly service fee with an average daily balance of at least $500. This account offers unlimited check writing and free, on-premise ATM transactions
UMB Bank offers a college checking account that does not require a minimum balance, said Teresa Smith, assistant vice president.There also is no monthly fee or service charge for Visa Check Card usage. Check service charges cost a quarter each.
UMB Bank, 1441 Wakarusa Drive
UMB Bank offers its customers two computer banking services. Home ATM is available to check balances
BANKING LOCATIONS
Capital Federal Savings:
Main Branch, 1025 Iowa St.
Alternate location:
1046 Vermont St.
Commerce Bank:
Main Branch, 955 Iowa St.
Alternate locations:
15th & Wakarau Drive
1015 W. 23rd St.
3000 W. Sixth St.
Clinton Parkway & Kasold Drive
Douglas County Bank;
Design County Bank
Main Branch, 300 W. Ninth St.
Alternate locations:
3101 Iowa St.
1501 Inveness Drive
711 W. 23rd St.
1444 Kasidow Drive
Mercantile Bank
Main Branch, 900 Massachusetts St.
Alternate locations:
3500 W. Sixth St.
1807 W. 23rd St.
2701 Iowa St.
1600 E. 23rd St.
647 Massachusetts St.
847 Tennessee St., drive-thru only
Mercantile Bank:
UMB Bank:
1441 Wakarusa Drive
and find out if checks have cleared, Smith said.
PC banking also is offered by UMB Bank. It uses Microsoft software and enables the user to pay bills online.
For students without a computer,
elephone bill payment is an option.
UMB also has a Total Check Service for students. Total Check Service is a separate line of credit for overdraft protection.
Online trading profitable for student
When a patron's account becomes
By Jani Kumpula
Special to the Kansan
Jon Eggleston often stops by the computer lab in Budig Hall between classes. But he does not go there to browse the Web or to check his e-mail. He buys stocks.
Eggleston, Lawrence senior, is not your traditional stock trader. But, at age 24, he is part of a rapidly growing group of investors who do their stock trading online.
Forrester Research estimated that the number of online brokerage accounts would reach 14.4 million by 2002 with total holdings of $688 billion, up from about 3 million accounts with holdings of $120 billion today.
In less than six months of trading, Eggleston has made more than enough money to cover next year's tuition.
Although most of the investors who trade on the Internet are men between the ages of 30 and 45, the fastest growing segment of online traders are between 20 and 25 — people like Eggleston.
"People talk about Generation X, but I'm not one of those," he said. "I'm part of Generation MS — the Microsoft generation."
Eggleston started trading online in November 1997. He had extra money left from his time in the military and wanted to start investing it for retirement.
"It was a piece of cake." he said. "I walked to the computer lab in Budig, applied for an account and had funds
Eggleston said that he was astonished by how easy it was to set up an online account.
there are probably more people our age who believe in aliens than in social security." he said.
wired from my savings account to a bank in New York City," he said.
Paul Koch, professor of finance at the University of Kansas, said that convenience and cost were the primary reasons for the rapid growth of Internet trading. He is not surprised that many young people are starting to trade stocks online.
"They're very in tune with working with a computer," he said. "People over 25 haven't perhaps taken as much time to explore it."
He said that stock markets had become a good place to invest money for retirement and that people were putting money in the markets instead of savings accounts.
Eggleston said that he was attracted to the low commissions for online trades. His online broker, SureTrade, charges an $8 commission for executing a trade of up to 5,000 shares. Eggleston does not find the 5,000-share limit burdensome.
"You got to realize that if you take a company like Dell Computers and trade 5,000 shares, it's $335,000 worth of stock that you can trade for $8," he said.
He said that he had tried a traditional, full-service broker but did not think he was getting value for his money. The commission was 10 times higher than what he pays to Sure-Trade
"There were times when I would be on hold for 10-15 minutes while he was talking to other clients," he said.
Eggleston also had problems reaching his broker.
"I have a class in Learned and a class in Wescoe, and I stop by the computer center between classes. It's so easy,"
Now, instant access to Wall Street is at his fingertips.
he said.
He said that Internet sites provided up-to-the-minute stock quotes and company press releases within 30 minutes.
Furthermore, Eggleston prefers not having to listen to a broker's advice. He wants to make his own decisions. SureTrade provides extensive stock information on its site that he uses. This information includes recent news, annual reports, historical-performance charts and other research.
"For people who have Internet access, it's ridiculous to deal with full-service brokers." he said.
He said that while some people prefer talking to a broker instead of merely typing in orders on a computer screen, it might not always be the best solution.
"Anyone who invests needs to be educated before investing," he said. But paying a broker is not necessarily the best way to become educated."
Eggleston, majoring in mechanical engineering, said he did not have much prior knowledge about the workings of the stock market, but he studied before starting to trade.
"I didn't jump in cold," he said. "I took about three weeks before I started trading. I got a book from the library, a lot of information off the Internet from different investment sites and learned the basics."
However, he said that learning how the stock market worked was a long and continuous process that could not be achieved overnight.
"I didn't have a feel of how the market behaves, but that's something I've been learning in the last few months," he
said.
He said that his primary objective was to learn as much as possible about the stock market while still in college and before he began buying larger amounts of stock. He spends considerable time following the market every day and checks his account about six times a day.
The learning and the research seems to have paid off so far. Eggleston started with $2,000 and has, in five months, increased his capital to $8,000. However, online trading can be risky, especially for irresponsible investors.
"I have a friend who has lost half of the money he has put in, and — especially the way Dow Jones has been doing — that's not very good," he said.
However, Eggleston said that people who understand what they are doing know how to minimize the risk of losing all their money.
He said that he used a mechanism called a sell stop-order as a safety net. If the price of a stock begins to plummet, Eggleston's stock is sold automatically if the price falls to the level of the stop-order. This minimizes his losses to the difference between the original value and the stop-order.
Eggleston said that people who might be interested in online trading needed to determine realistic short-term and long-term goal. He said that people should not expect to become rich overnight and that stock trading was a long-term investment.
Koch agreed that people should learn how stock markets functioned before starting to invest. However, he also said that people should not be intimidated by trading stocks on the Internet.
"Try it once, and you'll find out how easy it is. It doesn't make sense not to," he said.