Listener Questions

Madeleine Brand speaks with Day to Day personal finance contributor Michelle Singletary about money questions from listeners. Singletary writes "The Color of Money" column for The Washington Post.

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ALEX CHADWICK, host:

On Tuesdays we hear advice from DAY TO DAY personal finance contributor Michelle Singletary. Michelle answered listeners' money questions earlier in a conversation with my colleague Madeleine Brand.

MADELEINE BRAND reporting:

Welcome, Michelle.

MICHELLE SINGLETARY (Personal Finance Contributor): Thank you.

BRAND: The first questions are from listeners looking for books you've recommended in earlier conversations. Here's one. `You suggested a book on tax deductions regarding charitable contributions, a nuts-and-bolts type text.' Here's the other one. `I wanted to inquire about the book Michelle spoke about concerning teaching to give to charity.' Please remind us of the names and authors of those books, Michelle.

SINGLETARY: Well, the first book, the nuts and bolts, was "PricewaterhouseCoopers Guide to Charitable Giving." The publisher is John Wiley & Sons, and that's 19.95. And the second book is called "The Giving Book" by Ellen Sabin, S-A-B-I-N, from Watering Can Press, and that's also 19.95. And the second book is a wonderful, spiral-bound book full of activities for children ages six to 11, to teach them the importance of giving.

BRAND: OK, Michelle, our next question is about credit cards. The listener writes, `My wife and I just paid off multiple cards and don't plan to use some of them again. Is it better to cancel those accounts or keep them open to help build our credit score?'

SINGLETARY: Well, let's see. This is one of those `it depends.' If you have other credit cards that have a long history, that you've had them for a while, certainly go ahead and close these accounts. If you are about to apply for new credit, like a home loan or a car loan, you do not want to close those accounts because it can lower your credit score. One of the things that your credit score model looks at is how long you've had accounts. So some of those credit cards that you have you've had for a while, and you close them down, it could lower your credit score.

So again, if you are about to get new credit, car loan, home loan, you don't want to close old accounts 'cause that helps your credit score. If you're not in the market for credit and you just want to close all these accounts and kind of clean up, go ahead and close them. Your credit score might take a little ding, but you know, if you pay your cards on time, the cards that you have in going forward, it shouldn't be a problem.

BRAND: And finally, Michelle, we have this question about paying for school. `I am currently a junior in college and have about $16,000 in student loan debt. I received mail saying interest rates are going to rise and I should consolidate. My question is, should I consolidate these loans even though I may borrow once more to fund my senior year?'

SINGLETARY: The short answer is, you definitely should contact your lender about consolidating. Listen, there's lots of stuff going on right now in Congress that may change significantly the federal student loan program and one of which could increase your cost to consolidate in the future. Now in addition to that, the Fed has been raising interest rates. And so federal student loan rates change every July, and the likelihood is that that rate is going to go up next July. So if you've got a significant amount of student loan debt, you probably need to contact your lender 'cause you should consider consolidating. There's several steps you need to take to consolidate while in school. So you need to talk to your lender because one of the things is you got to place your loan in repayment. And one of the things that you're going to lose is that grace period. Whenever you graduate, you've got student loans, you usually have a six-month grace period before you have to start paying your loans. When you consolidate in school, that grace period goes away. But of course long-term you will save on the interest if you have a lower interest rate.

BRAND: Michelle Singletary writes The Color of Money column for The Washington Post. She's also our regular Tuesday guest for conversations about personal finance.

Thanks, Michelle.

SINGLETARY: You're welcome.

BRAND: And if you have personal finance questions for Michelle, just go to the contact page at npr.org. Be sure to include `Michelle' in the subject line.

CHADWICK: And thank you for that interview to DAY TO DAY's Madeleine Brand.

DAY TO DAY is a production of NPR News with contributions from slate.com. I'm Alex Chadwick.

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