Student credit cards and young credit

Q&A with financial whiz kid Danny Singh


At 11, he took over paying his mom’s bills and managing her financial affairs. At 19, he published his second book, this one on fighting foreclosure. Singh dishes on his money lessons

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When Danny Singh, now 20, was still in elementary school, he was managing the household bills, negotiating with lenders and collection agencies and building his mother’s credit rating.

A real life Alex Keaton, perhaps? Not exactly. Singh’s also a philanthropist. Profits from his second book, “Finance 101: The Whiz Kid’s Strategies to Fight Foreclosure,” published in October 2012, will be donated to the Children’s National Medical Center for HIV research. His first book, “Finance 101: The Whiz Kid’s Perfect Credit Guide” was published in August 2012. sat down with Singh to get his take on all things money and credit — and why he’s so angry about some for-profit colleges.

Danny Singh , author,
‘Finance 101: The Whiz Kid’s Strategies to Fight Foreclosure’
Finance 101: The Whiz Kid’s Strategies to Fight Foreclosure

He was only 11 when he started taking over his mother’s financial affairs. Now 19, Danny Singh is a college student and author whose first love is personal finance and eventual goal is to start his own independent credit advising agency. Let’s start at the beginning: Did you have a piggy bank when you were very young?

Danny Singh: Contrary to what some people think, before I was 11, I used to love spending money on Slurpees at the gas station, candy, junk food and Yu-Gi-Oh! cards. I did not really understand the importance of saving money, what individuals do with money besides purchasing items, and always thought the purpose of earning money was just to spend it.

I did have a piggy bank in which I would put money I received from birthdays and holidays, but I was more interested in credit cards. I used to witness my mom swiping her credit card without fully understanding what it was. I would ask her if I could swipe it at the checkout counters. She would let me do it sometimes to make me happy. I thought the credit card logos such as American Express, Discover, MasterCard and Visa were neat. I felt like an adult whenever I swiped her cards because I always witnessed adults using credit cards. How did you end up delving into your mom’s financial affairs?

Singh: My stepfather was unsuccessful in paying the bills in a timely manner and there were always angry representatives of companies and collection agencies calling for my mom because the house and all the bills were under her name. I would answer the phone. The companies would call almost every day and revealed information to me that some account or bill is past due and will be reported to the credit agencies if the payment is not received soon and they told me to have my mom call them back.

My mom started working longer hours at work so she could make more money. She was not good with computers so she would hand me her checkbook, ask me to open the mail and log in to her online account so I could pay the bill.

In the beginning, I was only paying one credit card that my mom was using, but as time passed and my mom became increasingly busy, I started to handle all the bills of the household because unknowingly, I started developing a love for credit and finance. And your money and credit management duties escalated from there?

Singh: My mom did not carry cash, so she didn’t give me paper money as an allowance. Instead, she added me as an authorized user on her credit card account when I was 11. Afterward, I would use my mother’s checkbook to pay off the credit card immediately. I was monitoring my mom’s checking account online for any fees or unusual activity and if there were fees, then I would call the bank and ask them to be refunded. When you assumed communication duties, did the banks have any inkling they were speaking with a child?

Singh: Many of the companies had her sign a confidentiality form saying it was OK for them to release her financial information to me. None of the companies knew or asked about my age. They just verified my mom’s information and confirmed I was the authorized party on the account to whom they can release information, and I had the power to make changes. Tell me about how you were able to help raise your mother’s credit scores.

Singh: My mom and I pull her credit reports together every six to seven months, and I study them to better understand how financial institutions and the credit agencies interpret credit. I keep copies of her credit reports and credit scores to monitor the growth.

I also have my mom keep all her credit cards open, and I monitor them for fraud. I have her use all of them once every year so they do not get closed for inactivity.

My mom and I use one credit card for our everyday purchases and save money through its rewards program. During the holidays, the store credit card providers send useful coupons that do save money, and I encourage my mom to use them. Afterward, I pay off the balances immediately to avoid getting charged interest. I asked my mom to freeze all her credit reports so she is not tempted to apply for credit because new credit checks make it harder to get cheap insurance (due to the temporary ding a credit checks will cause on her credit score). About your book: Why did you write a book about foreclosure?

Singh: Because so many adults are facing foreclosure. In Florida, where I live, there’s a bunch of signs on the road, reading “save your home!” and a lot are scams. They try to get the homeowner to sign the homes over to them or they take the money, promise to pay and then don’t. I want to educate people on these scams and what they can really do. I don’t want people to be worried every day about how to save their home. I want to help. I understand that you’re donating the proceeds from the sales of the foreclosure book to HIV research. Why this particular cause?

Singh: My friend passed away from the virus. I’m doing it in his honor. Also, I’m Indian and the disease is dominating India. In the beginning I wanted to be a doctor and that changed, but I’m still interested in medicine and healthcare. You’re in college — as a student, how are you supporting yourself?

Singh: I’m at Seminole State College of Florida. My mom and grandfather saved up for me and helped me pay for it. They didn’t want me to take student loans. My grandpa is a businessman and he saw the student loan problems and didn’t want me to have them too. Seminole is a good price so I’m saving what I don’t spend for my master’s degree program. I want to go to University of Central Florida. Student loans are rife with problems. What’s your bird’s eye perspective?

Singh: Student loans will be the next housing crisis because unlike home loans, student loans are not dischargeable in most cases in any type of bankruptcy or debt settlement.

I do not think some students understand how difficult it will be to repay them. Many students are living off their loans and are using them to pay for all their expenses — including expenses not related to school.  They have the attitude they will make enough money in the future to repay them. What’s the root of the student loan crisis, in your opinion?

Singh: For-profit schools are part of the root of the crisis because they target adults who work and have kids. These adults can do online classes with a community college at a fraction of the cost, they can even do get their bachelor’s degree at a community college.

Most of the federal aid money supports the for-profit schools and this takes away money from students who are attending nonprofit schools. Many students that graduate from for-profit schools default on their student loans because employers are reluctant to grant them jobs based on the performance they saw from previous employees with degrees from a for-profit school.

For-profit schools also convince students to accept private student loans from banks and companies when they cannot get enough federal aid money. The providers of the private student loans give for-profit schools an incentive for getting them new customers and they make up for this incentive by charging students high interest rates and fees. The variable interest rates go up to 18 percent.

Another problem is that some students come to college just to get financial aid and use the money to buy wants such as drugs, electronics or pay for personal expenses. They are not academically motivated because some of the grant programs do not require the students to maintain certain grades. What are you majoring in now and what do you ultimately want to do professionally?

Singh: My major is business and information management. My career goals are to work at a bank, start my own independent credit advising agency, and then do independent business consulting. Maybe even have my own credit card company! Do you think many kids have trouble learning about money and credit management because they see their own parents floundering with them?

Singh: If kids notice their parents are getting phone calls from debt collectors, then this is a sign their parents are not paying all or some of their bills. Kids need to understand the significance of paying bills on time, and the serious consequences if they do not. This can cost them a job or cause them to end up paying thousands more than they have to due to expensive insurance or high monthly loan payments.

Parents need to be honest with their children about their financial mistakes so kids avoid making the same mistakes. Unfortunately, some kids get misconceptions from their parents that it is OK not to pay the insurance or some type of bill, and they become more prone to become fiscally irresponsible without knowing the consequences. What are the three financial skills every young adult ought to possess before leaving home?

Singh: 1.) Have the ability to seek out the best deals. For example, if they want an item in the store, they should check the Internet to see which merchant sells the same item of the same quality at the cheapest price. 2.) Be responsible. Students should not develop a bad habit of using services, loans or credit cards and not repaying them. Good credit will allow them to save money faster for retirement and other financial goals such as buying a house. 3.) Save money for retirement immediately when you get a job. Some parents stress because they waited too long to save for retirement or wasted too much of their money.

See related:5 lessons to teach kids how interest works, 8 games that clarify credit for kids, Overexposing kids to money problems is a bad idea

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