09.15.23 Clark Answers His Critics on Clark Stinks / The Credit Card Competition Act

It's my pleasure to welcome you here to the Clark Howard Show. Our mission is to serve you and empower you to make better financial decisions in your life. One decision I made years ago was to add a segment of the show that is the highlight of my week and what we do here. It's our Clark Stink segment where you get to set me straight, disagree with me, be hot under the collar at me, whatever, because that's how we learn. We learn from constructive criticism from each other. And I really appreciate that you take the time to do your posts. And later, I've been getting a lot of questions about the Credit Card Competition Act. Now, I've got to tell you what's going on behind the curtain with this that the word on the street is this is going to eliminate credit card rewards, and I'm going to give you my 2% on this later in this podcast. But right now it's time for Clark Stinks. I should have never encouraged you to speak. You know what you think? I'm pretty stupid. You should be ashamed of yourself. Maybe I'm wrong. Maybe I'm wrong. Maybe you're right. Now. Okay, you ready? A fire. You're just a little smelly like deli meat a day past its prime. Recently you advised a listener to consider important factors when thinking about taking out a home equity loan to pay off credit cards and do home improvements. I appreciate that you pointed out that they need to make sure they're not the type person who will run up those credit cards again, but you did miss one very important piece when considering a home equity loan and that is the closing costs. Home equity loans often have very large closing costs attached to them just to establish the loan, usually with an appraisal and possibly other items. I know there's at least one credit union who will not charge you anything to get the loan established, my credit union, but this is something people need to take into account when determining if the reduction in interest paid on their credit cards will be a big enough amount to make getting the home equity loan worth it. That's from Judy. Judy, thank you. I want to draw a word thing here. Home equity loan is a fixed rate for typically five, ten, or fifteen years and home equity loans should only be taken out at a credit union. Period. Banks use them as a way to gouge customers. Credit unions generally offer very good terms on particularly five-year home equity loans. Also credit unions offer superior home equity lines during between a line and a loan. A loan again is fixed rate for the five, ten, or fifteen years. The interest rate typically offered on five years favorable, ugly, ten, and fifteen with the home equity line of credit, on the other hand, the interest rate can change every single month. The rates are very high right now. When the Federal Reserve reverses course and starts lowering the rates that it controls, the rate on home equity lines will decline from here. I appreciate you pointing out the ultra high closing costs that a lot of non-bank lenders and banks charge on home equity loans and potentially on lines as well. Those fees can be really ugly. Clark frequently shares the options available for car rental insurance. The rental car agency, your auto insurance, secondary coverage from credit cards, etc. But I've never heard him mention the premium protection available from American Express. It is offered at an affordable flat fee to all AMX card holders and his primary coverage. So you don't have to risk your auto insurer increasing your premium if you file a claim. Thanks for all the help you and your team provide David and Florida heading to Yellowstone. Oh, I tell Yogi Bear, I said hello while you're there. I love Yellowstone. We have talked about the American Express because we actually had a question posted on the podcast about it. It was how I remember, see, they're $20 for the whole rental or $25 depending on the level of coverage you buy and it's a flat rate. So instead of it, the car rental account are being charged a massive amount per day. It's a flat rate for the length of your car rental. You smell like a work rendering plant on a hot summer's day. That doesn't smell good. Okay. You are advised listeners to only invest in targeted retirement accounts. Well, I do that because I've listened to you since the 90s. This is not the best advice. More than 10 years ago, I was reading many financial newspapers and I came across a stock that peaked my interest because it seemed they were investing in the future. So I broke from my routine and invested a small amount in it, $400. That $400 investment is now worth more than $40,000 and has outpaced by far my targeted fund and growth. Well, I agree most of your retirement money should go into a targeted fund. A small amount should be set aside for hedges but only for educated investors. The moral is, investors should be reading about what companies are doing to invest in the future and you should make small bets on the companies you believe in to increase your chance of increasing your wealth and retirement. That said, I appreciate all you've done to help me save money, spend less and avoid getting ripped off Ken. Ken, thank you and congratulations to you being in NVIDIA from when it was worth like nothing and it's the hottest story stock in the marketplace now. The whole idea of the small bets, that is a philosophy that Charles Schwab forever ago referred to as core and explore and core and explore is fine. You do most of your investing and widely diversified funds and then at the edge of it, you do targeted bets or targeted investing, which is what you did and it paid off for you big and if it had gone, the 400 had gone to zero would have made no difference in your life. But now that it's gone up so many thousand times over, I guess, whatever it is, here you are. I shouldn't do the math. You're sitting on a nice pile of cash from that little bet that you placed and that is the whole idea of explore, do the core, then explore. When discussing leaving your money in a 401k versus moving it to a roll over IRA, you never discussed the superior legal protections of a 401k. And while you talked around commingling existing IRA in a previous 401k, it wasn't clear that you need to set up a roll over IRA unless the law has changed, Dave. Dave, that is a beautiful point, depending on the state in which you reside, an IRA may have vastly inferior protections from a 401k, 401k assets are really solidly protected. And if you're worried about a potential liability risk or anything like that, having money in a 401k even after you leave a place of work is a superior choice in most states to having money in an IRA. Like usually a diagnosis is spot on, but your fax on physician loans stunk like a gangrenous leg. A leg with gangrene. The statement that physician loans are all adjustable rate is false. My wife and I, both physicians, have used two of these loans twice and have received excellent fixed rates both times. All the other benefits you listed are spot on. I would just hate for a new physician to not take advantage of these loans because of a false preconception of the product. Ben. Thank you. And if the loans available that you have found available from a physician practice are superior to other ways of people paying for often as an elected procedure, then I stand corrected. Clark, you don't, didn't stink, but you smelled a little off. Never say never. You said to never ever, never check a bag when flying. Many military members have this offered to them for free in addition to having the AMX Platinum, which covers incidental airline fees up to $200, which covers baggage fees, on your selected airline for the year. Nor do we have to pay annual fees on credit cards due to the SCRA. Sorry, but I'm currently active duty and I can't seem to pass up something that is free, at least on domestic flights, and I'm willing to risk it. However, I will take you up on your advice and look into buying an air tag. Thank you for everything you and your team do, Casey. Casey, thank you for your service to our great country. And it's wonderful what you and other members of the Armed Forces do to keep us safe and free in the United States. Another one about check baggage. Sorry, Clark, but you stink worse than the high school locker room. Your idea of never checking a bag is crazy, but to use an example of the United customer that went to retrieve their own bag is poor supporting evidence. Millions of bags are delivered without a hitch. Your example would be like highlighting a lottery winner as a reason to spend money on lottery tickets without commenting that most people do not win. Sorry, Clark, be fair. Most people do not lose their luggage. Ricky, it is true that most people do not lose luggage, but the loss rates from airlines has tripled since 2019. And I assume it's because airlines are so short staffed right now. Their operations are having more reliability issues, far more delayed flights with misconnections, and the number of canceled flights way up, and anytime there's a hiccup in the system, bags are more likely to go missing. So I'm really happy when I take my one regulation-sized carry-on bag, and it's with me from the beginning to the end of my trip. I just feel more comfortable that way. Okay, so I want to mention this one too that a lot of people wrote in about, and it was an advertisement. When you did the segment on sports gambling, an ad played after that for a sports gambling site. Yep, and so we have very little control over that case, right? So yeah, there are a few different sources for ads on the podcast. We have some direct-sold ads, and then we have a supplier that puts in sort of automated ads, but we can block categories. So I contacted them when I started hearing from people, because we don't hear what the ads are. And I asked them about this. I said, I thought we had blocked all gambling ads, because there are categories you can block. And they said that there are subcategories. We had block casinos and things like that, but sports betting sites were not blocked. And so I think on Mac and maybe even picked up on keywords that were in the podcast and played this ad. So I've now blocked them. Hopefully it won't happen again, but that's what happened. The people think you're a sell-out, but you didn't have any idea that that happened. You know, the whole internet world and podcasting world, the digital presentation of content world, has all these curveballs that come at us. And I apologize because that really is the height of hypocrisy. I was just telling you all of the problems with sports betting and gambling. And then we play an ad for it. Sorry. Clark, you stink worse than toxic fumes from a credit card being burned over an open flame. On a recent show, you implied that high-end cars and discount store parking lots correlated to wealthy shoppers inside the store. You have all people should know that many wealthy people got that way because they maintained older vehicles instead of borrowing money to drive around and quickly depreciating assets. Some of those drivers in the high-end cars don't have a nickel to their name. Love your show, Lucen, every morning during my run, Adam. Adam, thank you. Maybe I'm making an if then that's not proper, but I make the assumption that somebody in a high-end car at an Aldi is not somebody who is there because they don't worry about their money. And they likely are someone who is not a conspicuous consumer of, in the fact, they've reached a point in their lives that they're driving the nice car. Maybe I'm doing the worst thing you can ever do assuming, which you know how the rest of that phrase goes. Okay, Clark, you don't stink, but you miss saving some people some money on outdoor cushions. Someone wrote in that they had bought some outdoor furniture from Costco six years ago. The cushion covers had failed. Rather than suggesting that they buy new cushions, you should have suggested that they bought cushion covers. I did this myself for a set that I found on the curb. The cushion still had life, but the covers were faded. They are available in various sizes at Kristen, my favorite site, Amazon. It's also an affordable way to update cushions that are still in good condition if you're just tired of the color, Tanya. Tanya, thank you for that suggestion. And I appreciate it because I love it with what we do on Clark Stinks is you widen my horizons, you widen the ideas that I should have in this brain of mine. You don't stink, but you need to get one term right. You mentioned a digital TV antenna. This is a misnomer as is HD antenna. An antenna's design is frequency specific. The mode of transmission is irrelevant. Television signals reside in three places. VHF low, just below the FM broadcast band. VHF high above the weather and public service band and UHF. The antenna's length varies by wavelength, so as the frequency increases, the antenna length decreases. To get a really good view of antenna specs, what's a YouTube channel named the antenna man, Alan? Alan, thank you very much. I'm sorry, I do use slopping language sometimes, particularly with technology, taking old phrases and new ones and crunching them together. I especially appreciate the suggestion of the antenna man because I am asked a lot from people and I've talked about antennaweb.org and sites like that where you can figure out what kind of antenna, what quality of antenna, what features an antenna needs to have based on your address to be able to pull in the maximum number of free channels. And the free channel thing people are a lot more interesting with how the cost of streaming services is going up, up, up, and away right now. Coming up ahead, we're going to talk about our credit card rewards about to go up, up, and away. I'll feed you on the rumor mill that is spreading like wildfire. At the end of your first year, discover credit cards automatically double all the cash back you've earned. That's right, everything you've earned, doubled. All the cash back from eating it your favorite soup dumpling restaurant, doubled, all the cash back from that trip where you have sort of learned the snowboard, also doubled. In the best part, you don't have to do anything ridiculous to get it. Nope, discover does it automatically. Seriously though, see terms and check it out for yourself at discover.com slash match. If you have a family, you know how much your loved ones depend on you. In a worst-case scenario, you wouldn't want them to worry about money. A good life insurance plan can give you peace of mind that if something happens to you, your family will have a safety net to cover mortgage payments, college costs, or other expenses so that they can get back on their feet and focus on what's most important. Perhaps you already have coverage through work. Employer sponsored life insurance may not offer enough protection for your family's needs, and it won't follow you if you leave your job. Checking life insurance off your to-do list can be a satisfying experience, and getting covered can be even more satisfying when you use policy genius. Policy genius knows how valuable your time is. That's why their technology makes it easy to compare life insurance quotes from America's top insurers in just a few clicks to find your lowest price. With policy genius, you can find life insurance policies that start at just $292 per year for one million dollars of coverage. Some options offer same-day approval and avoid unnecessary medical exams. Policy genius has licensed award-winning agents who can help you find the best fit for your needs. They work for you, not the insurance companies. That means they don't have an incentive to recommend one insurer over another, so you can trust their guidance. Policy genius is for parents, caregivers, and anyone else who has people who depend on them. They simplify the process of getting life insurance so you can protect the people you love. No wonder they have thousands of five star reviews on Google and Trust Pilot. Your loved ones deserve a financial safety net. You deserve a smarter way to find and buy it. Head to policygenius.com or click the link in the description to get your free life insurance quotes and see how much you could save. That's policygenius.com. There's a Donnie Brook going on in Washington between the Visa Mastercard cartel, the giant monster mega banks that control credit card issuance in the United States, which are overwhelmingly the market share for credit cards is in the hands of city bank, Chase, and American Express, although there are others that own Capital One. Those are the big issuers of credit cards and then there are others that play in the credit card game. And we in the United States have the highest fees that are charged to merchants in the world far and away. I don't know if anybody who's close because Visa Mastercard operate in the United States as a cartel, kind of like OPEC does with oil. And so there's been attempt after attempt in Congress and the first one that seemed like it had any traction that is bipartisan sponsored the credit card competition act of 2023. And the banks and the credit card companies are going crazy over this because what it would do is force the ability for any merchant if he or she wished, if any business wished to use alternative processors for their payment system at their business. Right now we're in this cartel that forces these massive costs onto the retailers, restaurants, any organization selling and making the ability to pay with credit cards available. And so there's what's known as an astroturf campaign going on now spreading all kinds of fear trying to reach wealthier individuals with this astroturf campaign heavily on social media and websites because so easy now for businesses to target specific demographic segments. And so they're targeting wealthier individuals saying you better do something about this. You better let your congressman or senator know you don't want them to outlaw rewards on credit cards. So what's going on behind the scenes is the banks are in terror that competition will be allowed for processing payments at businesses. So they're trying to raise a ruckus with individuals who love their credit card rewards and they're twisting the story making it sound like credit card rewards are going to be outlawed. So what's really going on? If competition is allowed for the processing of credit cards the fees that merchants have to pay will collapse and go to world standards which is a tiny fraction of what they are right now. And for many businesses now credit card processing fees are the second or third largest expense at those businesses. And that's why more and more businesses are saying yeah you can use your credit card but you're going to have to pay extra to use it. So it is true if we go to world standard and through having competition all that surplus money that's coming out of restaurants and retailers and various businesses pockets will ultimately have the marketplace effect of destroying the reward market and you and I will no longer likely if the free market is allowed to work you and I will no longer be able to get all our rewards like me with my 2% cashback card and my mileage cards and all that stuff those will be devalued or go extinct. It's true. The law that is proposed the bill that is proposed will not eliminate rewards but the marketplace being allowed to operate as a free and open marketplace may well have the result of eliminating all those benefits that high volume chargers who pay their bills and full get each and every month. My bias is always let the free market work and so if I lose my rewards I'm okay with that because it allowed the free market to function which it does not in the United States. We consider ourselves to be a free market economy a capitalist economy but one of the problems in the United States now is heavily influential political contributing businesses and lobbying organizations destroy and certain segments that benefit them the free market functioning and I want the free market to function which is why even though the astroturf campaign is lying the result they worry about or say could come true the end of the rewards but if that's the free market working I'd rather it be a free market. Okay James and South Dakota says our 15-year-old daughter has started babysitting and her clients want to pay using a person-to-person pay app. In other words they want to use Venmo cash app or sell. Paypal whatever. Cash app or PayPal etc. So I know you've warned us about the dangers of using these services with people outside the family and friend zone what would you suggest we do to protect her from getting ripped off yet making it convenient for her customers seems most of her clients don't use checks or cash anymore. Yeah James she's fine tell her to go ahead and set up the apps she's 15 you can help her go open and account at a credit union local to you in South Dakota and she can link PayPal cash app Venmo to it and she can one of her pitches is I make it very convenient for you to pay and I accept all these methods of payment including cash. Accept Zell. Accept Zell yeah no Zell because big bad Zell nothing but a nightmare and can you imagine 15 she works hard making all this money she has Zell linked to an accounting credit union then all her money vanishes and the credit union just like the banks are like hey that's life that's tough doesn't matter what happened you lost your money because Zell is big bad Zell for a reason it is much more dangerous to use than Venmo cash app or PayPal at least at this point. This one's from Beverly in South Carolina it's been a while since I bought a new cell phone and to my dismay our favorite place Costco doesn't sell them anymore that I can find so I went to my backup place which is Walmart and I didn't find much there either I use T-Mobile and I'm not interested in changing carriers right now where do I buy a phone do I have to go back to the T-Mobile store I want to just buy one outright instead of using a payment plan on my T-Mobile bill. So first let me explain what happened at Costco Costco had a sweetheart deal for Costco for years they had an outside vendor that set up the cell phone deal there and Costco members normally got vastly superior deals buying phones and signing up for service inside the Costco versus going to an AT&T Verizon or T-Mobile store or wherever unfortunately the deal that Costco had negotiated was too good and the vendor went bust and so those booths disappeared and what's in their place now is Costco at least for now is temporarily renting space to the big cell phone carriers and the deal stink you go in there and basically you're in a crummy cell phone store for one of the three major brands so don't be conned unless Costco fixes this buying anything from those kiosk that are in the Costco stores now because they're nothing so buying a cell phone now how do you do it generally the thing I'm finding best for people who don't want to be in a payment contract with any cell phone carrier is you go direct to the selling site of the manufacturer or often Amazon to buy a cell phone when you're looking for a new or reconditioned phone often if you go to the manufacturer they're offering deals for you to buy a phone with a offer crazy generous trade-ins so generous that I'll go and I'll buy a used phone on eBay it's in good condition and trade it in and often I'll save $500-800 on the phone by doing that the one exception with Costco is Costco.com often sells iPhones cheaper than you can buy somewhere else and they do these regular promotions where they offer deals on iPhones significantly better than you can buy direct from Apple and often better than what you can buy from one of the big cell phone carriers themselves. All right I'm going to read both of these questions because they're about a similar thing. John in South Carolina says since you have a Sam's master card do you use Sam's gas it is not on the top tier gas list I'm just curious. Richard and Connecticut says Clark talks about buying gas at a top tier gas station. I've seen a no named tanker leave a no named station and go to a shell station is Costco gas and is Costco gas top tier. Costco gas is top tier Sam's is not at this point and the way tanker trucks work I went when I was doing a TV story years ago I went to a tanker farm because of this very question people were asking why is this showing up at an exon or shell or whatever so in those trucks if they're delivering to if they're you know third party fuel fuel tanker farm trucks the additives that are required for that particular gas or added before that gas is delivered to that station at least that's how it used to work a station that is top tier will usually have signage there saying that it's top tier gas what is top tier gas it is a standard that assures you as a buyer that you are getting gas that meets a long list of high standards if you go somewhere else they're only meeting state standards which are inferior to top tier I drive an electric car so the times that I fill up or when I'm in a rental car and yes I have filled up a rental car at Sam's club gas because it's cheaper I filled up rental cars at Costco because it's cheaper so that's my measurement of gas when it's not my own car if I were filling up my own car would I only go to places that are top tier the answers yes for me and I know we've had a lot of people write in on both sides of this thing with top tier and so I I tell you that's what I do because I believe that the top tier standards improve the the likelihood of the quality of the gas that you were buying and I hope that you have a question that you've not heard addressed that you really want to ask or there's something going on in your life and you need one-on-one advice guidance or information know that that's something we offer for free one-on-one advice Monday through Friday each week unless it's a holiday and so you can talk with a member of team cart for nothing 30 hours a week and it's something we've been doing since 1993 to find out how to reach a member of team cart go to carc.com slash cac again Monday through Friday and have a great day and a good weekend at the end of your first year discover credit cards automatically double all the cash back you've earned that's right everything you've earned doubled all the cash back from eating it your favorite soup dumpling restaurant doubled all the cash back from that trip where you have sort of learned a snowboard also doubled in the best part you don't have to do anything ridiculous to get it nope discover does it automatically seriously though see terms and check it out for yourself at discover.com slash match