11.16.23 Love & Marriage & Joint Bank Accounts / Postal Identity Theft

It's great to have you here today on the Clark Howard Show, where our mission is to serve you with information, with knowledge that empowers you so you can make better financial decisions in your life. Remember, if you have a question, something troubling you, you don't know how to solve a problem. You just need information. We provide free, one-on-one advice, 30 hours each week through Team Clark, our Consumer Action Center. This is something we've been doing since 1993, so if you want to have that free, one-on-one advice and guidance, please go to Clark.com slash CAC for all the details. So we're going to talk about something that's been a question I've had repeatedly through my entire career, and it's when a couple gets married, starts living together, whatever, do they keep their money separate or do they merge accounts? What do they keep together? What do they keep separately and all that? We're going to talk about the effect on a relationship depending on how you do that. Then later, there's been an ongoing problem where a criminal does a change of address on your mail, and suddenly your mail is going to them with disastrous consequences for you. I'm going to tell you there are new developments in that area and what you need to know to protect yourself. So I've been an advocate for years with couples, whether they're living together or married and living together, about couples having a joint account. I also believe that couples should each have their own accounts, but that having a joint account is a really smart thing for a couple to have. I think it builds a stronger bond, and that's always just been a subjective thing. I've always felt that way. Well now, there's an academic paper in the Journal of Consumer Research that's done by Oxford University in England, but found in a multi-year study that a marriage in they were doing marriage, not couples, living together for simplicity. That's what they were doing, but they found a very, very strong correlation in the strength of the marriage over time of people who had a joint account versus couples who had kept their finances separately and private from each other through their marriage, that the relationship is much stronger. Only enough, they found that the romantic nature of a relationship steadily was better in a relationship where there was a joint account at the center of dealing with household expenses than couples that kept everything separately that had actually made the relationship from the romantic standpoint stronger. It's all about trust, right? How important that is. The second thing was that by having a joint account, there's a lot of internal narratives we have where we're talking to ourselves internally and we think one thing and our partner think something else. We just stay in our own orbits, but you have that joint account and you see suddenly a bill come in, let me tell you my wife and I've had this conversation, you just have a bill come in and it's like, what was this? You talk about it and you talk about what's important and my wife and I work on our finances together, something we didn't use to do and now we do and I find it's created much more trust with finance because we talk about things. We really shouldn't be doing that right now because or this would be a good time to do that because. And so having the joint account forces conversations, it strengthens the relationship. And there's something else they talk about, the communal nature that you know how depending on who you got married by part of the vows might be something along the lines or the priest, the minister, the preacher, the rabbi, the imam or whatever, or whoever you got married by whether it's religious or not, they'll say something two or now one and that's always part somehow of so many of the vows that when you merge into a joint account, that it really does have those what they call communal benefits of two and one. But again, it doesn't mean I think everything should be put together. There are direct advantages for multiple reasons. You should have their account and then each having the house account and then each having their own stuff. I shared the example many years ago when my dad died in the 1980s and everything in that era was in my dad's name. My mom didn't have any credit, she didn't have anything and had to start over and it was not easy. That's one of the reasons why having the joint and then the separate and a couple is really smart from a financial and a personal standpoint and I know it's always a negative to say but half of marriages don't last and in relationships less than half last. So having some separate in addition to whatever joint you do important from that negative standpoint and with that having been said, starting off with such a warm fuzzy ending to that about marriage and money. Nicole is with us this week as Christa is with family all week long and we'll return on next week's podcast and Nicole great to have you here and who's your first question first question is from Rita in Alabama Clark in a recent newsletter you stated that the highest credit score person can receive is 850. According to the Citibank website, my credit score is 855. Why the difference by the way, I didn't necessarily set out to achieve that score. I am very cautious about credit due to learning the hard way about the problems that occur when you don't pay the balance in full each month. I have one credit card in a small house mortgage. That's it. The only reason I got the credit card was because you cautioned against making debit card purchases. After getting the card, I took your advice and paid the balance in full each month. I generally charged the same amount each month and I increased my line of credit once in the past four years and then by modest amount. All of these things have netted me the current high score. So Rita, first of all, the credit scoring models vary so much by type, provider, and all the rest. The standard industry scoring model peaks at 850. That's the highest you can get. There are other models that peak at 900. There's another one that I think peaks at 999. They're all different methodologies and scores. So what you're looking for with any score you look at, like the one you get from city on their website, is what you want to see in that score is you want to see what category that puts you in. So if they gave you an 855 against what, is it against 900, 999, 950? That is it. But the odds are you've got a really great score anyway. You already said on another method, you're a perfect 850. And so nothing for you to worry about. And that is great. I'm really surprised that with just a single credit card and with that small home mortgage that you've been able to get a perfect 850 because usually having multiple types of credit and multiple cards are needed to get to a perfect 850. But you have managed to crack the code and have a perfect score or something I have never had. Usually I'm up or 700s to just over 800. And as long as you're depending on what kind of credit you're trying to get, 760 or above or 780 or above on the 850 scale, you're rock solid, you can get any loan you want. Next question is from Jonathan and Wisconsin. We just returned from a trip to Italy. I used mainly my Chase Sapphire preferred credit card since the Chase website said no foreign transaction fees. When I checked my foreign transactions on Chase's website after coming home, they were a few dollars higher than any receipts I kept. I usually used tap to pay while in Europe. Did that automatically convert each transaction to dollars which I didn't want per your advice when I tapped to pay if not any idea why each charge was a few dollars higher. So Jonathan, what happens I was just in Italy in September. I saw this repeatedly unless you override it at the terminal, they're going to do that rip off conversion to dollars at that terminal. It's this massive rip off that I saw not too long ago in Eastern Europe on a trip in the summer. It's just saw it in Italy. It's spreading I guess like a plague across Europe. Nobody is doing you a favor when on the credit card term of it's a portable when they hand to you or one in a retailer that you're at one like you're used to in the US. They're not doing you a favor. They're cheating you when they auto convert from local currency. In this case, the euro into dollars. You're paying typically as much as 10% more for each purchase when they do that. Tap to pay is not the problem. Looking at the terminal and choosing I found in Italy often I had to choose option two for euro option one automatically defaults to dollars and rips you off. Anywhere you're traveling in the world now, you have to be aware. Banks talk to each other, they say, hey, there's a new way to cheat customers. This is an ugly way to cheat people, particularly if you have a chase card that has no foreign transaction fees, you were defeated by the banks of those merchants that were tricking you into paying this extra junk fee for converting the purchase into dollars at a ridiculously awful exchange rate. So that's why you always have to look at the terminal before you go to pay and make sure you select local currency only. From Dylan in Illinois, do I have too much insurance? I'm a 33 year old homeowner with a newborn. Now wife and I have about 1.8 million in assets including for you, including our home equity. In around 680,000 of debt, 660 of that is from mortgage and 19,000 is from a car loan. All of our insurance is through USA and we currently have the following policies. Two one million dollar 30 year level term life insurance policies for myself and my spouse, homeowner's insurance, a one million dollar umbrella insurance policy, $15,000 personal property insurance for wife's engagement ring and auto insurance. All of these policies cost us about $400 a month. Is this too much insurance? We live in Chicago earned $300 to $400,000 gross in a per year and own a two bedroom townhouse. So number one, 85 bears, one of my favorite NFL seasons and teams ever, they were something else. You were not born yet then, you missed it and it dealt with futility forever to bears. So Dylan, at your income you actually don't have enough insurance, million dollars each level term is not enough. You should have roughly 10 times your annual income. So you were short of insurance quite a bit in the event you're young in the event of one of you unfortunately suffering an untimely death. It's not enough insurance for the survivor. So I would say weirdly you may need more life insurance than what you have now in order for the surviving spouse to live the lifestyle that you currently live. So with the newborn, absolutely, this is a good time to assess the amount of insurance you have for level term life insurance. Every other insurance you have is fine, you're doing great. So yeah, I think that having some more level term insurance would be the right thing for you to do to protect the surviving spouse and your new bundle of joy and congratulations to you on that. And I hope you're both getting some sleep these days. Coming up ahead, we're going to talk about a form of identity theft that has been around for a while and the government has helped the identity thieves for years and is now trying to do something about it, but there's something you got to know and do to help yourself them and share with you straight ahead. This episode is brought to you by SAP. First, the bad news. SAP Business AI won't help you generate Cubist versions of your family's holiday photos, but it will help you understand which supplier is best to help you roll out your plant-based packaging in Southeast Asia. Identify the training your junior project manager needs to rise up the ranks and automate repetitive tasks while you focus on big innovations. So you can be ready for the next opportunity. Revolutionary technology, real-world results. That's SAP Business AI. Hi, I'm Don MacDonald from the Talking Real Money Podcast. Simple, honest financial advice is hard to find because there are too many people in the financial services industry and even the media who will do or say anything to get your money. Well, for decades, my co-host Tom and I have been trying to help people better manage money on the radio, TV, and in our podcast. 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Identify the training your junior project manager needs to rise up the ranks and automate repetitive tasks while you focus on big innovations. So you can be ready for the next opportunity, revolutionary technology, real-world results. That's SAP Business AI. There's been a big problem for years with people pretending to be you in a number of different ways. They may do it by trying to fully take over your identity. They may try to do it in slices of your life. Something that is an oldie but baddie that continues are the variations of people doing changes of address for you with the postal service. They're not doing you a favor. They're trying to direct your mail, direct packages that would be coming to you. I mean, this time of year, every day can feel like Christmas morning. If I'm a clever thief and I'm able to change the address of delivery and all the packages suddenly are being rerouted to a drop for the criminal instead of showing up at your home, then you're left holding the bag because they say, well, we have proof of delivery was delivered. And then with the mail, gosh, criminals were able to change address with virtually no processing that caught identity thieves from changing your address. And so they might duplicate your credit card, have a field day using it and your bill is not showing up. You don't even realize, oh, I didn't get my bill from whoever, and then suddenly a collector is calling saying you're over your limit on your card and you're like, what? And so the postal service is implementing more security standards that are supposedly going to better vet the individual requesting a change of address, but you can still do it online and criminals tend to know so much about you that it's not necessarily going to stop the problem. So what you have to do is be aware, one thing that I have, this is so analog. We have a list of when all our monthly bills are due each month and we check them off every month. A lot of times there's been nothing bad going on. It's just the mail got lost. That's no excuse when you don't pay your bill, right? We're during COVID when we were getting notifications from various people we do business with that there were problems with the reliability, mail delivery during COVID and they said, you know, it's no excuse with us. You're not excused for being late. If you didn't get our bill, you better check online, all that. So that's when we came up with this form that we do. It's just really, we've got this like trapper keeper, like an elementary school kid uses them. We got all our bills we pay every month and we mark them off and we got a list of when they're supposed to be paid and all that. It's not a lot of extra work, I promise, that it keeps our credit solid. Anyway, if you notice the amount of mail you're getting suddenly just goes way down or no mail is coming at all, know that you are probably a victim of an identity thief who's trying to take over your mail and do things behind your back that are going to hurt you down the road. So you notice any pattern like that that suddenly mail delivery shrinks to you, packages aren't showing, whatever, go to the closest post office and find out if anything funny is going on with a forward that has been established on your mail. And Nicole, it's not my goal to make people paranoid or make people think that everybody out there is a bad person. There are bad people out there and we have to be prepared, right? Well, this explains when I did my address change at the post office, it was more of a hassle than I thought. I didn't have enough identification, paperwork and different things to get my address change and I didn't understand what was happening. Now I do. That is what's going on. Yeah. So what you got for me? So we have a question from Michael in Alabama. My son is a full-time student. We followed your advice and added him as an authorized user to our credit card without him knowing a few years ago. He also has a credit karma account, which shows that he has a 766 credit score, a very good credit score. Very good. He applied today for one of your recommended student credit cards, Capital One Saver student and he was denied. Any idea why this would happen or what we can do to help him build solid credit in his final two years of college? So first things first, Capital One has to give you a reason and there could have been a clerical reason. You haven't said what they said in the denial. If they didn't give a clear reason, you need to get your son to call them and have them either tell him or request a written explanation because he needs to know, what do I need to do that will make a know-a-yes, you know, what is it I have to do? And your son may not be excited about doing that. He needs to do that because while you're in college, it's the best time to get a card. We did a review recently of student credit cards and what came in the highest was actually a card from Discover, a student card from Discover that's been at the top of the heap for years. And this can happen. There's a variety of reasons why one issuer made decide not to issue a college student card to one person then to another. They may have had trouble verifying your son's identity based on which credit bureau they pulled from. Any of those things could be possible explanations, but instead of wondering, the first assignment for your son is to talk to Capital One and find out what their reason for denial was. Question from how in Texas, I received my paper statement from my city double cash back card. Reviewed it with my spouse, went to city.com to pay as usual. I was stunned to be greeted with a pop up informing me that I have to change to paper list statements or after three such notices will not be able to pay city online or on the city app anymore. I did not make the change in the hope that the customer outcry might get city to drop that new requirement. Please clerk, spread the message that this is a customer no service move, so city might reconsider. I've been hearing this from people in city, I mean, come on. This is classless. If you want to tell people moving forward that if they're going to have a card with you, it has to be paperless. That's fine. But to use your brute force and size to say, you either do it our way or we're taking away your candy, really, that's a trashy way to treat people, especially, the number of times we as taxpayers have bailed out city bank when you were going to go extinct when you were insolvent as a bank, including I think more than a trillion dollars 15 years ago, this is just not cool and you should really rethink this. And I don't know if all if this is an experiment by city or of all customers of city bank credit cards who get paper statements or getting these notices that it's either our way or the highway. I don't know that yet. And I've been looking around. I've not been able to find anything from the prior questions people have asked about this to know if this is experimental or this is universal. But whatever it is, it's not the right way to treat people. Clarkies, let us know in the comments if you're watching on YouTube if you get this pop up. Our next question is from Joel in South Carolina. That's a tip. More of a tip than a question. Be careful with multifactor authentication. When you set up a second factor authentication for an account, which is a great idea, always create a backup authentication method. Some accounts will let you do backup codes, others that you provide, authenticator apps, an email, text or phone. I recently set up a paid account with Microsoft and only set up their authenticator app, but didn't set up another method. I then replaced my phone and could not get into my account. I was stuck paying for an account I could not use. I was able to get it fixed through multiple support calls, but it was a huge paying and not easy. Tip to your listeners, if you use multifactor security on your accounts, set up more than one method. Okay. Same thing happened to one of my kids with Microsoft. One exact thing with the authenticator thing and they couldn't get in, it obviously is a good security precaution if you can't even get in your own account. And Microsoft needs to have an easier way, but your suggestion of having a second two factor is obviously a good suggestion. Two factor authentication is a very, very good idea. We're going to see more and more, though, websites go to using authenticator apps of different types and it does mean that people being locked out of accounts with no easy way to get back in is going to become a more common occurrence, a more common complaint. And Joel, thank you so much for the suggestion. And now it's time for today's Clarky, Nicole, who is today's from today's Clarky is John. My name is John and I've been listening to you forever back in the CFL ball days. I used to write the date on a ball, but whenever I used a new ball, put in the new ball. And my experience was that at least, and I say at least 50% of the balls went bad before the warranty period was up. And the large percentage of them went bad in the first year, wow, but I'm happy to report I'm doing the same with the LED balls and only one LED ball that has gone bad before the warranty period. And I think that one was in the first year, could have been after two years, but I think was after one year, okay, thanks a lot, Clark, for all you do. I am really impressed that you were that methodical and you've been marking light bulbs going all the way back to the compact fluorescent era. I don't know if you ever heard the story. So if you've heard it before, I'll be very brief telling the story. We bought a house in 2011 at the height of the CFL era for people who wanted to save money on electricity. And so we put CFLs all over the house and yes, some of them prematurely went out really quickly, but others lasted and lasted and lasted and I hated the light from the compact fluorescence. And so I wanted to change them out to LEDs and we were in that house 10 years and I'd keep waiting. Is this ever going to burn out this, you know, this CFL? And finally, I gave up and I just replaced bulbs that were still working. I know that's wasteful and put in the much better light LEDs and the LEDs are getting cheaper and cheaper and cheaper. I mean, routinely on Clark deals, we have them, they'll be as cheap as 50 cents of bulb now and well-made LED should last a decade or more. That's just phenomenal and the energy they use about nothing and you can make LEDs expensive like my son who has all these LEDs that can be their smart bulbs that can be controlled remotely on his phone from anywhere in the world. He can change the color of a light, turn it off or on and I needed to turn two lights off in his room when he was out of town and I couldn't figure out how to do it. And he didn't answer my call. So what did I do, Nicole? You started flipping light switches, started, yeah. That wouldn't have helped. I wouldn't unplug the lamps from the wall. I know that such an analog error thing to do, but I just unplugged them and was able to turn them off. So then his app wouldn't have done anything. That's more technology than I actually need being able to remotely control the color of a light bulb and whether it's on or off on my phone. Anyway, thank you so much for joining us today. I appreciate all of you. The variety of what we're hearing on the car keys is so wildly different and I appreciate all of you taking the time to post those. And remember what we're here for. We're here for you to be empowered so that you find your way with ideas that you gather over time to live on less than what you make, save more, spend less and avoid getting ripped off. Have a great day and remember tomorrow is Clark Stinks.