0:00

Hope you're having a great holiday week.

0:02

I am off on adventures,

0:05

so this is a best of

0:07

edition

0:08

of the Clark Howard Podcast. I

0:10

hope you enjoy it and that you

0:12

have an enjoyable holiday week.

0:20

So glad to welcome you here to the Clark

0:22

Howard Show. Our mission is to serve you and empower

0:24

you to make better financial decisions

0:27

in your life today. More

0:30

and more newspaper stories I'm seeing,

0:33

yes I still read a thing called newspapers,

0:37

about neighbors getting in the spats with neighbors.

0:40

Come on, people ending up

0:43

getting in trouble with the law over

0:46

dispute with a neighbor, ending

0:48

up suing each other. We got to talk

0:51

about this. And something

0:53

else we got to talk about, this

0:55

is a train wreck. Just at the time

0:58

that interest rates on credit cards

1:00

have hit an all-time high,

1:02

people are charging

1:04

up credit cards like a storm. We're

1:07

going to talk that through. Right

1:10

now, who was

1:12

it who said, was it Robert

1:14

Frost, fences make, tall fences

1:17

make good neighbors, whatever that was. Kristie,

1:19

you were an English major. Who was who said

1:21

that? Was that Jack London? Was

1:24

that Robert Frost?

1:26

Who was that from school? I hate it when you put me on the spot like

1:28

this. It was Robert Frost. See,

1:31

I knew you'd know. I just looked it up.

1:33

Oh, seriously? Yeah. I

1:37

thought for sure you'd know. No, I don't know

1:39

everything. I

1:43

can't remember so much.

1:45

So no. So I've told the

1:47

story about when I was in poetry

1:49

in high school. You have, yeah. But

1:51

you remembered. So you're much

1:54

better English major than I. Oh,

1:56

definitely not. I mean, think

1:58

how bad my grammar is. digress.

2:00

So let's talk about what we're going to talk about. And that is

2:03

neighbors today. I mean,

2:06

we don't even wave to each other so often

2:08

now. We've become

2:11

so detached and

2:14

disconnected in so many

2:16

neighborhoods from the

2:18

family that moves in next door, or

2:21

the couple or individual that moves in

2:23

across the street. And

2:26

so many of the just

2:29

childish disputes that

2:31

I keep reading about, anecdotally,

2:35

it seems, although

2:37

there's no actual data I've seen

2:39

anywhere, that the number of things

2:41

ending up as court cases,

2:43

either civil or criminal, involving

2:47

feuds between neighbors, come

2:49

on, come on. I

2:52

mean, this is not okay.

2:56

And yes, there's going to be unreasonable

2:59

people who happen to move in next door

3:01

to us. It

3:03

will happen. But most

3:06

of the time, things happen

3:09

because of this anonymity thing. So,

3:13

I mean, do things simple. A

3:16

new neighbor moves in, go

3:19

take them some cookies or something and welcome

3:21

them to the neighborhood. I mean, we

3:23

as Americans, one of the

3:25

big curses we have, there's

3:28

a lot of loneliness. Now, we

3:30

don't have the connections we

3:32

used to have through organizations.

3:35

I've talked about this before, through

3:37

being a member of a church, whatever, we

3:39

don't participate in organizations

3:42

like we used to, we don't have those

3:44

natural binds that develop

3:47

as being part of something.

3:49

Then we go home. And

3:52

people don't even know who we are. And we don't

3:54

know who they are. And they

3:56

can be our across the street neighbor, next

3:58

door neighbor. I always make

4:00

it a point when somebody moves

4:03

in

4:04

to go say hello to them.

4:06

And it's funny how often they're shocked.

4:09

I mean shocked. And then

4:12

once they get over the shock, they really appreciate

4:14

it that somebody came and welcomed them

4:16

to the neighborhood. I mean this is simple

4:19

stuff. This is basic blocking

4:21

and tackling in life.

4:24

It's simple, simple

4:26

kindnesses pay off so many

4:29

different ways in our

4:31

lives. You never know when

4:33

that person you go to greet to the neighborhood

4:36

will end up being a

4:38

great friend down the road

4:40

or something. But if you never met them, you

4:42

never reached out to them, you're never going

4:44

to have that connection.

4:46

And so you're thinking right now,

4:49

what does this have to do with

4:51

why I'd listen to this podcast and know how to be

4:53

better with my money and all that? Well,

4:55

it has actually a lot to

4:57

do with it. Because let's

5:00

dial back to the first thing I said. These

5:02

stupid disputes that end up in court.

5:05

When you've broken that wall of anonymity

5:08

with someone, the odds that something's

5:10

going to get nasty like that and end up in court

5:12

and you're going to have to go hire a lawyer and all that, they

5:15

fall to near zero.

5:17

Yes, there could always be somebody who's a complete

5:20

horse is something who's your

5:22

neighbor who causes a problem

5:25

and they won't fix it. And

5:28

you're left with your only alternative

5:31

to sue them. That's the rare circumstance.

5:34

Most of the time, strangers

5:37

may behave that way to strangers, but

5:39

acquaintances or friends don't behave that

5:41

way to acquaintances or friends. So

5:44

yes, there's money involved. And

5:48

life is about more than just money, which

5:50

is something I always remind people. Because

5:53

there are people who think that all I'm about is

5:56

the dollar bill. No way.

5:58

There's a lot more to it. more than

6:00

that. If I had to say one thing that you're all

6:02

about, I would say service. Because

6:05

you've spent your whole life doing service. Yeah,

6:08

there you go. Because you

6:11

do more in service work

6:13

than anybody I've ever known. That is 100% true.

6:17

Just say thank you. Very fool. Just

6:19

say thank you. Thank you, Clark. Okay. All

6:22

right. Mike in Washington says, what are the pros and cons

6:24

of owning a timeshare? What criteria

6:27

are used to rank timeshare organizations?

6:29

Well I think everybody should

6:31

go out today and buy six timeshares

6:34

because they're so great. And

6:37

if you look at your calendar, it is April Fool's

6:39

Day. Timeshares

6:42

are a defective product. And

6:44

I don't recommend that anybody

6:47

ever buy a timeshare. The

6:49

reason is, if you look at the soft underbelly,

6:52

what happens after you buy that timeshare?

6:55

You may even love staying at the timeshare

6:57

you buy.

6:58

The problem comes when you

7:01

don't want the timeshare anymore.

7:04

The market is a broken market

7:07

because there's not even a single

7:09

buyer for every hundred timeshares

7:12

for sale. Most people who

7:14

want to get rid of a timeshare have

7:17

to pay the person

7:19

to take it over from them. It's

7:22

thousands of dollars

7:23

just to beg somebody and

7:25

buy them off

7:26

to take over your timeshare. Now

7:29

there are people who believe that

7:32

if you buy

7:34

from one of the big brand name hotel

7:36

chains that those timeshares

7:39

are magical and they will somehow

7:41

rise in value. Not

7:44

true. Think about this.

7:47

Take a condominium building. Building

7:50

has 100 units.

7:51

If I

7:54

built those condos

7:56

and I now sell them,

7:58

how many sales does my sales

8:01

force have to make? A

8:03

hundred. If on the

8:05

other hand, I build in a hundred unit

8:07

timeshare complex, how

8:10

many times do I have to sell it? Really?

8:20

I thought it was 52 weeks a year. 50, only

8:23

sell 50. Oh, okay. Okay.

8:26

No, but you're right, I was teasing. Oh, gosh, Clark. Don't

8:29

do that to me. That

8:32

was so fun. Anyway, so the

8:37

sales administrative costs and

8:39

commissions

8:40

eat up the value of the real

8:42

estate. There is no value

8:44

left at that point. You've paid so much

8:47

money to buy that one

8:49

week out of 50

8:51

that is sold for each unit. And

8:54

so that's why they

8:57

become a defectors. And

8:59

so you have to have a negative product and

9:03

one that you should not buy because

9:07

they are virtually

9:09

unsellable. There are no brands

9:11

of timeshares that

9:15

I would say they're an exception to that. If

9:18

you ever wanna buy a timeshare, buy

9:21

one from someone who's paying you to take it

9:24

over, it's a cost to

9:27

taking over their timeshare obligation.

9:30

And Christine Illinois says, just wanted

9:32

to add one more point to Clark's advice to

9:34

keep receiving paper credit card statements in

9:36

the mail. Because my husband is unorganized

9:38

and uninterested in keeping track of the monthly

9:41

finances at our house, I've become

9:43

the expert. I sometimes worry that my

9:45

advice about how to manage our accounts online

9:47

will be forgotten if something happens to me.

9:50

So no matter how much the card site pesters

9:52

me to cancel statements, I keep them coming

9:55

so I'll always have something current to hold in

9:57

his hands.

9:58

So that is... yet another

10:01

of the reasons added to the list

10:03

of why paper statements are really valuable.

10:06

I find last night,

10:09

I go once a month, I go through line

10:11

item by line item, all the statements,

10:14

and I found some new

10:16

recurring charge. And I'm like,

10:19

what is this? I start digging in,

10:22

and one of my family members who will remain

10:24

anonymous signed up for a trial

10:27

of one of the streaming services

10:30

that no one to my knowledge has ever

10:32

watched in the house

10:33

since they signed up for it a month

10:36

or two ago.

10:37

And so if I hadn't gone through

10:39

line item by line item,

10:41

I would have missed that, and I would have been wasting $100 a

10:43

year. Just

10:45

an example of what you don't see when

10:48

you look at an electronic statement,

10:50

your eyes just process differently,

10:52

and you're able to take

10:55

so much more charge with that paper

10:57

statement. We have had the rebuttals, though, from Chris

10:59

to from people who say, hey, you know

11:01

what's better? Just store

11:03

them on a drive. And

11:06

if you prefer doing that and you prefer

11:08

electronic statements, maybe you travel

11:11

frequently, you live in more than one place,

11:14

and you keep a backup of them,

11:16

that would be an alternative.

11:18

Bob in Wisconsin says, my young adult daughter

11:21

went to renew her passport and fell victim

11:23

to what I would call less than ethical website.

11:25

Oh, not this again. She

11:27

was in a hurry before her appointment at the post

11:29

office for the renewal and searched online for

11:31

passport forms. The font and colors

11:33

nearly match the government website perfectly,

11:35

and the fee was nearly identical. She

11:38

thought she was paying the processing fee, but what

11:40

actually happened is she paid $89 to

11:43

have the website print the forms for her. While

11:45

I can't call this a scam since she didn't receive

11:47

a service for the money paid, it certainly

11:50

doesn't seem ethical. This service also

11:52

has all of her personal info now, including

11:54

her social security number. So I'm teaching

11:56

her about credit freeze tonight. Please

11:58

pass this tip on to your audience.

11:59

and so no one else pays a bunch of money

12:02

for very little service. Thank

12:04

you, thank you for taking time to

12:06

contact us about this. This

12:09

is a problem that most often attacks

12:11

small businesses where there'll

12:13

be a number of government forms and filings

12:15

you have to do and you get an envelope

12:18

that looks like it's from a government

12:20

agency but it's not and you pay

12:22

them a fee that's on top of the fee, you pay

12:24

government and then they have key

12:27

personal information if they

12:30

turn out to be more than just thieves of

12:32

your money pretending to be the government but

12:34

then they decide to try to steal your money, they've

12:36

got key information to do so. This

12:39

is a consumer version with

12:41

the passport thing that

12:43

we've heard before. Know that

12:45

if you go to the U.S. passport office

12:48

and you fill out your application on there,

12:50

they also have a fill

12:52

in the blank thing that you print

12:55

out.

12:55

Even better moving forward

12:58

for anyone renewing a passport

13:00

in 23, you may be eligible on a renewal

13:05

for the new program where you don't even have

13:07

to send in your

13:09

original passport, they have all that

13:12

and you submit your entire application

13:15

electronically. They tested

13:17

it, it worked, they've expanded it and

13:20

it will become the way

13:22

you renew a passport in the future

13:24

is it will be all electronic

13:26

and hopefully at that point these scamsters

13:30

will fade into oblivion. Up

13:33

next, credit card balances

13:36

are moving on up right

13:38

now and that's not a good

13:40

thing at a time of higher interest rates,

13:42

we got to talk about it.

13:45

You've been through a lot, I mean give

13:48

yourself a break. If you

13:50

go back to 20, 2020 kicked

13:54

off, it's just a normal year and

13:57

then COVID came and swept

13:59

away. swept over the globe and

14:02

swept over the United States, we

14:05

had crazy loss of life

14:07

in the United States. A million and a half,

14:09

approximately, of our fellow Americans

14:12

perished during COVID, a

14:15

brutal tragic toll. Early

14:18

in COVID in the United States, if you remember,

14:21

we, I mean, if you remember, you lived

14:23

through it. We went through the

14:26

wave of tens of millions

14:28

of people being laid off in

14:30

just a two-week period of time. I guess

14:33

that was March or April of 20.

14:36

And then we had the massive government

14:39

rescue packages

14:41

from every layer of government pouring

14:43

money into people's pockets,

14:45

pouring money into companies, pouring

14:47

money into government coffers with borrowed

14:50

money. And then we had these series

14:52

of rescue packages and 20 and 21.

14:57

Then 22, as

14:59

we came through most of COVID

15:02

and life kind of returned to normal,

15:06

we had this massive hangover

15:09

of inflation

15:10

from way too much money being pumped into

15:12

the economy.

15:13

And inflation was just galloping

15:16

for a while.

15:17

And now the inflation fever

15:19

has broken for

15:21

the most part. And we've had several

15:23

months where costs have gone

15:26

negative. That's why the inflation

15:28

rate looked over a 12-month period, month

15:31

after month, pretty much keeps getting reported

15:33

as lower than it was because

15:35

we've had what's known as negative net

15:37

inflation for the last little while.

15:40

And at the same time, there are higher

15:42

prices baked into the system.

15:44

Look at how many things you've been paying more

15:46

for. And now, because of the

15:49

peculiarities of the world oil

15:51

market,

15:52

we've started seeing gasoline prices

15:54

going back up.

15:56

I mean, there's a lot of things

15:58

you and I have had to go through. through in

16:01

a really short period of time

16:03

in the span of our lifetimes. It's

16:06

been brutal.

16:08

All the disruption. It feels like quicksand

16:11

under our feet. And then

16:13

the after effects of inflation,

16:16

the effects of it, a lot

16:18

of people, particularly incomes up

16:20

to 60,000 a year, have

16:22

been having trouble

16:24

making ends meet each month because

16:27

incomes didn't rise at

16:29

the level that inflation was bringing

16:31

costs up that you had to pay every

16:34

month. Look what happened for a while

16:36

with rents, where renting

16:38

a place went up so much.

16:41

Now that has started bending back down,

16:43

but the damage was already done.

16:46

And how much of your monthly budget is going to that?

16:48

If your car croaked and you had to buy a

16:51

used car, it was really

16:53

bad ugly in 21 in particular,

16:58

and just ugly in 22, and

17:01

now becoming a more normalized used vehicle

17:03

market. The cost pressures have been coming

17:06

from every direction,

17:08

but the income did not keep up. And

17:11

so there are a lot of people

17:13

that are stretched. So

17:15

you've been using credit cards to try to close

17:18

the gap each month, but a really

17:20

brutal time to do that because

17:22

the banks are charging the highest

17:25

average interest rates ever on credit

17:27

cards right now. So if you're running a

17:29

balance, you're getting eaten up. Now

17:32

as income moves up from that

17:34

arbitrary figure I gave, I've

17:36

looked at charts and so 60 is

17:38

kind of an arbitrary number, you

17:41

get above that, there's more breathing

17:44

room that if you are living

17:46

on credit cards to a certain extent

17:49

to cut here or there. Everybody's

17:52

situation is different, but I can tell you as the income

17:54

moves up from 60k a year,

17:56

there's more room for

17:58

you to trim here or there. change how

18:00

you do this, change how you do that, and

18:03

be able to start the process

18:06

of getting that credit card debt under control.

18:09

But it's really important to do so because

18:12

this is one of those inflection times

18:14

where the balances are going up at

18:16

the same time the interest rates are going up,

18:19

which means

18:20

handling your monthly expenses

18:23

can get more and more crowded out as more

18:25

and more of your money every month is having

18:27

to go to service the interest on

18:30

the credit card debt you've accumulated.

18:32

It's a bad cycle. And

18:35

so

18:36

if you are in a position to

18:38

go through everything you're spending

18:40

right now

18:42

and see where you can make an adjustment

18:44

and not do this or not do that or change

18:47

how you do this other thing and close

18:49

that gap, do so. Or you can go

18:51

the most extreme strategy of all

18:54

and that's where you go to cash and

18:56

you pay your expenses

18:59

that are walking around expenses in

19:02

cash and you pull

19:04

a certain amount out each pay period and

19:07

if you're forced to make that stretch

19:09

from pay period to pay period,

19:11

you'll surprise yourself at what expenses

19:14

you don't incur when you're

19:16

watching that cash dwindle.

19:18

Krista? Krista in California says,

19:20

I know it's an excellent idea to pay credit

19:23

card balances in full each and every month.

19:25

However, what should the maximum purchase

19:28

APR on a fixed rate credit card

19:30

from a credit union be if one

19:32

has to carry a balance for a while? In

19:34

the past, Clark has indicated that he would like

19:36

a seeker of such a card to aim

19:39

for an interest rate that's less than 10%. However,

19:41

what if one can't get a fixed

19:43

rate or even variable rate credit card with a sub-10%

19:47

interest APR from a credit union, particularly

19:49

in light of America's current inflation situation?

19:53

So, the credit cards from

19:55

credit unions, you may have seen the

19:57

rates, you know, I would talk about getting a 9. or 10%

20:01

from a credit union, right now

20:03

you may see that as 11 or 12. It's still going

20:07

to be usually about

20:09

a third lower in interest

20:12

rate than what it is from a bank because

20:15

credit unions are co-ops, they're run for

20:17

and by their owners,

20:19

which is you if you have an account there.

20:22

And so that's why credit union interest

20:25

rates

20:26

on credit cards tend to be

20:28

significantly lower than the average

20:31

for a bank.

20:32

So if right now because of the

20:34

interest rate pressures, what

20:36

I used to talk about at 8, 9% is now 10, 11, 12%, you're

20:39

still

20:42

way ahead of the game

20:45

with a credit union credit card than you

20:47

are

20:47

with one from a traditional bank where

20:50

the average now is bumping closer

20:52

and closer to the unbelievable

20:54

percent of Brenda

20:56

in Georgia says I had trouble managing my

20:59

spending over the years and got into bad

21:01

credit card debt.

21:02

I acquired eight credit cards and three

21:04

store credit cards. All have been paid

21:07

off. Now I only use one maybe

21:09

two cars and pay off the balance ASAP.

21:12

I finally worked my way up to an improved credit

21:14

score of 780 hard

21:16

work and sacrifice to control my emotional

21:19

spending. I want to close out the cards

21:21

I no longer use and stick to just two to

21:23

three at most. What do you recommend?

21:25

I want you to put them in a drawer

21:27

and get them out of your wallet,

21:30

but I don't want you Brenda to close

21:32

any of the accounts because that will take

21:34

that 780 and lower it because

21:37

the available credit you have

21:39

on those cards

21:41

is really advantageous to you. Now

21:44

the three store cards, store credit

21:46

is junk credit and if

21:48

they don't have a Visa MasterCard

21:50

logo on them they're just for that particular

21:53

retail store.

21:55

You want to close those fine but

21:57

your majors the five major

21:59

ones you you have, keep those open.

22:02

The only exception would be if there's one with

22:04

an annual fee. In that case,

22:07

apply now that your credit standing is so

22:10

good,

22:10

apply for a card you'd really like to have

22:13

from someone else

22:14

to replace a card with

22:16

an annual fee that you're closing. But

22:19

congratulations to you facing

22:22

what felt like a mountain of debt

22:25

and your credit score devastated,

22:29

doing everything you needed to to pay it off

22:31

and now a 780 score. That's great.

22:36

Awesome. Dan in Virginia says a question about paying

22:38

for medical bills. Is there any reason not

22:40

to use the insurance website to pay

22:42

them versus paying each medical provider

22:44

directly via mail or their own website?

22:47

It is convenient to pay bills all in one place,

22:50

but I'm slightly concerned I may overpay

22:52

in some situations.

22:53

So you

22:55

must like playing horseshoes if you do

22:57

this. Don't do it. Do not

22:59

pay through the payment portal of

23:02

any of the giant insurance companies because

23:05

you'll find repeatedly that the bills

23:08

don't match up.

23:09

What you actually owe the provider

23:12

could be less than what you pay

23:14

through the insurer portal could

23:17

be more and you could end up being reported

23:19

as a deadbeat, not paying a bill. So

23:22

I know it's more hassle,

23:24

but it's become much easier with

23:27

most medical facilities,

23:29

doctor's offices and the rest to

23:32

pay on their own portal. I know

23:34

it's an extra step versus

23:36

just going one stop to your insurer's

23:39

payment portal, but avoid

23:42

that temptation of ease

23:44

because what's easier up front

23:46

could be more of a problem later.

23:49

And it would be nice if the bills

23:51

matched up.

23:53

They don't most of the time. And

23:55

I want to tell you something I

23:57

really appreciate.

23:59

I appreciate it. the variety of

24:01

all the questions we had on today's

24:04

podcast. It's wonderful. You

24:06

bring issues to light

24:08

that are things

24:09

that maybe I haven't thought about in a while,

24:12

a new perspective on something that may

24:14

not have occurred to me, and

24:16

provide guidance and help

24:18

to your fellow listener. And that's

24:20

what we all are. We are all members

24:22

of Team Clark. And whatever

24:24

way we connect to each other, whether

24:27

it's at one of the websites, Clark.com

24:29

or ClarkDeals, our free newsletters,

24:32

our Team Clark Consumer Action

24:33

Center. Our community on Clark.com.

24:36

Community on Clark.com. We

24:38

all serve each other. And

24:41

that's why I thank you for

24:43

being a member of Team Clark. And

24:46

have a great day.