Balance Your Statement

curb online

Balance your statement
Online banking lets you manage your finances when you want to

by joanna borgione

Stopping into his local bank branch next to the corner store, a young, newly hired accountant chats with his teller about the big jump his savings will see with his new position. Signing his deposit slip, he hands it to the teller and receives a receipt. He says goodbye and trudges through the thick, freshly fallen snow toward his car. As he prepares to leave, he glances at his receipt and notices his balance seems off. He removes his hat and gloves as he re-enters the building, hoping the disparity can be settled before the bank closes for the evening.

Across town, another young professional checks her savings account balance at her apartment. Sitting in her pajama pants, she sips tea and gently scrolls down her statement on her laptop. She smiles when she sees her first paycheck has already been direct-deposited into her account and although her auto-pay bills were already deducted, she still has spending cash. Closing her computer, she nestles into her warm sofa and turns on the television.

Online resources make managing finances quick and easy. This self-service is a necessity for busy young professionals who make up a large portion of online bankers.

Eric Bangerter, director of Internet services for UW Credit Union, says convenience is a major factor leading customers to this e-finance revolution. Their online members enjoy having direct control over their finances and the credit union ensures this control by investing in the convenience of the site.

Bangerter sees a growing number of people who seek and research financial plans themselves before committing to one. It’s now possible to research various types of banking accounts and to find competitive loan rates—all this information is at customers’ fingertips via the Internet. Customers can sign up for an account directly through the Internet after finding the plan that fits their needs.

Michelle Reed, a 22-year-old talent agent assistant, uses her online banking service because she can see accounts, make payments online and even apply for loans or credit cards through the Internet. For Reed, e-banking takes the stress out of paying bills. “I can pay [the] minimum balance on my bills the last day possible and don’t have to worry about checks getting lost in the mail or not arriving on time,” she says.

Aside from the ease and convenience of these online sites, most young adults are already Internet-savvy and have no problem adjusting to this type of banking. Although a high percentage of UW Credit Union’s young professional demographic uses online services, some members are still reluctant to utilize the service.

The Pew Internet Project found that low incomes, security fears and Internet saturation are reasons many people turn away from online banking. Aaron Mlot, a 27-year-old educator, does not bank online because he says “too much personal information [is] available to those who know more about the Internet than I do.”

Mlot’s fears are well justified. As banking becomes more technologically advanced, so do the crimes associated with it. “Phishing” is the practice of using trusted corporate names to solicit information from Internet users. Phishers create emails or websites that invite consumers to update their personal and financial information. Although the messages appear to be from recognizable financial institutions, the information goes instead to the conniving impersonator.

Jim Johannes, a dean in the UW-Madison School of Business who serves on the boards of two financial institutions, agrees people are legitimately frightened of online fraud. “People are afraid to death that some hacker is going to get into their account and milk their account,” he says. Johannes also pointed to “spyware,” computer programs criminals send via email. “In the minute you respond to it, it creates software on your system that can read every keystroke you have and send it back to them.”

Still, victims of online identity theft lose less on average than those who are hit using traditional paper banking. Online account management allows people to keep a constant watch on their transactions instead of waiting for monthly mailed statements, according to the Better Business Bureau and Javelin Strategy & Research. Identity theft victims who use online banking lose $551 on average, while those who use traditional banking lose $4,543 on average. Paper banking identity theft is as low-tech as removing bank statements from trash cans or mailboxes, while online theft requires extensive computer knowledge.

According to Johannes, Internet banking sites are convenient and fast, with opportunities to complete every transaction offered by brick-and-mortar financial institutions, aside from withdrawing cash. “Every bank that I know of has one of those sites and they are getting very sophisticated and very user-friendly,” he says.

Online banking is also a way to build a steady relationship with current financial institutions for future interactions and services.

“Access to financial services is an incredibly important asset in a young person’s life,” Johannes says.

Johannes suggests opening multiple accounts with multiple financial institutions, making sure these accounts are not the free, promotional services, to show one is serious about finances and intends to invest in the institution’s services rather than just use them. He advises never to overdraw accounts and always pay bills on time to build a high credit score and to qualify for future financial services, such as loans for a house or car. Having a high credit score also saves money in the future with interest rates. These two points are easily managed through online banking services. Also, financial institutions prefer customers to bank online because it helps reduce their costs. Therefore, treating a financial institution well can ensure a quality relationship.

Investing in services can make one’s financial life easier, but be careful to use the services wisely. “If you have a bad credit record because you’ve abused or misused this when you’re a young junior or senior in college or a first year graduate student because you don’t know what you’re doing, you’re going to be five, six years behind the eight-ball,” Johannes says.

Follow these tips to ensure a secure and stable credit report:

Monitor your credit report – Obtain a free yearly credit report from a credit reporting agency - Equifax, TransUnion or Experian - to watch for inaccuracies that may indicate unauthorized transactions. Visit www.annualcreditreport.com for more information.
Pay bills on time – Being just 30 days late on payments tarnishes your record for seven years.
Maintain account records – Keep a constant eye on credit card bills and bank balances to catch illegal purchases or withdrawals.
Do not respond to financial emails – Avoid responding to emails that request financial information. This is a sure sign of phishers. Real financial institutions will contact clients without requesting personal information.
Attend to your mail – If paper balances are mailed from an online account, be sure they arrive on time (if not, it is an indication that someone may have changed the address). Also, shred financial documents to avoid information being taken from the trash.

E-banking is a tool any young professional can use to make financial management easier, more convenient and more secure.