Pod Insights The Clark Howard Podcast 06.05.26 Clark Answers His Critics on Clark Stinks / Rent: Tenant Power About this episode Friday - Clark Stinks day! Christa shares Clark Stinks posts with Clark. Submit yours at Clark.com/ClarkStinks. Also, are you blindly renewing your lease and paying more for rent every year? Stop! A massive boom in apartment construction across most of the country has officially flipped the script. It’s time to stop being passive and start letting the market work for you. Clark breaks down the exact strategy to slash your monthly housing costs. All this and more on the June 5, 2026, episode of The Clark Howard Show. Clark Stinks: Segments 1 & 2 Lower Rent: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Why Series I Savings Bonds Are a Good Deal Again 401(k) Loan Calculator - Clark Howard Travel Insurance: What You Need To Know Before You Buy How To Make Your Online Accounts Accessible When You Die Best 529 College Savings Plans By State Ask your landlord to lower your rent — now 4 Fastest Ways To Improve Your Credit - Clark Howard Clark.com resources: Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices. Visit megaphone.fm/adchoices
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1:16 Speaker 02 It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. And today is what you've been waiting all week for. Clark Stinks is about to come your way. Our very popular segment where you get to learn how I may have gotten it wrong. And Krista, while you were on vacation, then you had pneumonia and all that. My wife, Laine, filled in. And the hardest thing for her to do, filling in for you, was reading the Clark Stinks.
1:53 Speaker 03 I knew that was going to be hard. Thank you so much to Laine and everyone loved. I hope you told her like to read the comment. Like, everybody loved her so much and getting to know her because obviously she's a wonderful human being and she did such a great job.
2:08 Speaker 02 For her having been an actor for, for her whole life, almost, you don't ever read reviews or comments.
2:15 Speaker 03 Oh, that makes sense.
2:16 Speaker 02 They can flip you out and make you question what you do and all that.
2:20 Speaker 03 Well, hers were 100% positive. Everybody loved getting to know her and having her on. So I really am grateful to her and to you for flexing around my vacation and then I did get ill after, so.
2:33 Speaker 02 Pneumonia. You saw I freaked out when you told me.
2:37 Speaker 03 Walking, it was basically walking pneumonia.
2:39 Speaker 02 Yeah, having had life-threatening pneumonia when I was a kid. I hear pneumonia and I just, it's one of those conditioned responses. But anyway, so we get to hear Clark stinks and then later, I want to talk about something that I got the first inklings of about two years ago, first mentioned it, and now the balance of power between renters and landlords has completely flipped. I'm going to tell you what you need to know if you're a small landlord, what you need to know if you're a tenant, later in this podcast. But right now, without further ado, it is time for Clark Stinks.
3:20 Speaker 04 I should have never encouraged you to speak.
3:22 Speaker 05 You must think I'm pretty stupid.
3:23 Speaker 06 You should be ashamed of yourself. Well, maybe I'm wrong, maybe I'm wrong.
3:27 Speaker 03 Maybe you're right, pal. All right. It's not as hard for me anymore because I know you take it so well, but I do get annoyed when people criticize you.
3:40 Speaker 02 Wait, wait, wait, wait, wait, wait, wait, wait. This is such a valuable thing for me because it's so important that, you know, somebody gets in their habits, they might not see the whole picture. It's hard for us as humans to see a wider picture or to see a detail that you missed. And so. Or just have an opinion that's set in my ways and maybe I need to rethink it.
4:08 Speaker 03 All right.
4:09 Speaker 02 And so Clark stinks is great.
4:11 Speaker 03 I'm starting off with Krista D. stinks, as this person said, but I'm only reading this because it sounds very self-serving. So many people wrote in to correct me on this, so I had to. Steve in Wyoming, Krista D., your recent recap of the time you met Henry Winkler was a bit off, like too old egg salad. You gave a good explanation of Jump the Shark and it was nice, but when you mentioned that Marion Ross played the role of Fonzie's mother, Marion played the role of Richie's mother and Fonzie was never adopted. Fonzie rented the garage apartment and was like a brother to Richie. Richie's older brother was Chuck and he disappeared after season two. Interesting. Pete in Massachusetts.
4:52 Speaker 02 I'm not quite sure I know what we're talking about.
4:54 Speaker 03 Remember my Henry Winkler story?
4:56 Speaker 02 Yeah.
4:56 Speaker 03 Of course, right? You made me tell it. I'd called him the name Ross and I said it's funny because Marion Ross was his mother on this show Happy Days, but no, she played.
5:06 Speaker 02 You know, I never, ever saw an episode of Happy Days.
5:09 Speaker 03 Oh, well, that's the problem. All right. Pete in Massachusetts. On a recent show, Clark was asked about good savings rates and mentioned the possibility of investing in US Treasuries, which was a good suggestion. What he didn't mention is that for those of us living in a state with income taxes, the additional perk of US Treasuries not being subject to state tax on the income they generate. Also, Schwab and Fidelity both offer auto rollover of US Treasuries, so you can just set it and forget it.
5:37 Speaker 02 So, thank you for this because after we talked about this on the podcast and YouTube show, I have had so many questions from people just stopping me because the US Treasury market, the interest rates have gone up so much that it's cyclical and right now, because federal spending is out of control, inflation has reared its ugly head really badly.
6:01 Speaker 02 So Treasury rates have gone way up. And so people are interested in how to do this. So you can use Treasury Direct. And you can go to treasurydirect.gov and see how to do that. But most people find that too complicated and often use the services specifically of Schwab and Fidelity or buy the unbelievably low-cost Treasury funds that Vanguard offers. So you're getting great rates and you're also, as mentioned here, in states with high income tax, avoiding that also.
6:36 Speaker 03 All right. Lynda in New Hampshire says, "I listened to you talk about your new 401K loan tool, which I think is amazing. Sadly, your description of the tool was a little less amazing. Dare I say, slightly stinkish on this one. I've been listening to you for more years than I can recount, and I know you like to keep things general, but sometimes it's more helpful and more impactful to put actual numbers to an example. 401K loans are also one of my pet peeves because people often don't understand how they really work. I hear it all the time. It's a great option. I'm taking a loan from myself and paying myself back with interest, so it's a win-win. Many people think there are no downsides because of this common misunderstanding. If you'd walked through your own tool using a real-world example, it would have completely debunked that theory.
7:18 Speaker 03 It would have shown that the seemingly almost free $20,000 loan could actually cost someone $10,000 over time, more than $10,000. Another great feature of this tool is that it compares the 401K loan to alternative buying options. In the example you discussed, the alternative loan would have cost about $3,800 versus the roughly $10,000 cost of the 401K loan people assume is nearly free. Putting concrete numbers to these concepts makes the impact real for your listeners." And that's a tool at Clark.com.
7:48 Speaker 02 That was from James?
7:49 Speaker 03 No, that probably should have been who developed our tool. No, Lynda in New Hampshire, thank you for that.
7:56 Speaker 02 Yeah, I mean, it's hard for me when I'm talking about something that we have on Clark.com. Feels like I'm just touting our own thing, so I tend to soft pedal it. But I gotta tell you, this tool is great. Just as you said, when you feel like, oh, this is great, I'm gonna borrow from myself and I'm gonna pay myself back, it's gonna be cheap money to borrow, the actual cost over time is mind blowing.
8:22 Speaker 03 I'm gonna go to Jay in New York now, he says, okay, Mr. Clark cheapo, please get yourself an electric toothbrush, any dentist will tell you they're worth it. You already mentioned that Lidl and Aldi carry generic refill heads, so there are definitely ways to save money on them. I usually buy my refills at BJ's Wholesale Club because they often have good discounts. A lot of times, they run specials like six refills for around $20, and every now and then, there's also a Berkeley Jensen coupon for an extra $5 off. I actually keep memberships to all three warehouse clubs and maximize whichever one has the best deal, especially for gas when I'm traveling.
8:58 Speaker 02 So I am also a member of all three warehouse club chains, and I do use an electric toothbrush. What made it sound like I don't use?
9:07 Speaker 03 I don't know, we were talking about the Oral-B toothbrushes and the refill, somebody had asked a question.
9:11 Speaker 02 Oh, a lot of them are so expensive, so I use generic refills. The ones that I'm using right now are from, I think they're from Lidl.
9:20 Speaker 03 Okay. All right, Howland in Nebraska says, Clark, you stink like the chicken I left on top of the freezer for a week.
9:27 Speaker 02 Ooh.
9:28 Speaker 03 When you discuss travel insurance, you never mention that it's about 8 to 10% of a trip's cost on average. If you were to go on eight trips and put your insurance money away each time, you'd probably have an equivalent amount to pay for one trip. If you set that money aside in a nice, high-yield account, paid for all your inconveniences and unused travel expenses, you would save a lot of money on insurance. I would say you should buy emergency evacuation insurance for those huge, unexpected emergencies.
9:55 Speaker 02 All right, so Howland, the biggest problem with trip insurance isn't even that, I would say it starts at 6% of the cost of the trip. It's not that, it's that getting the claims paid by the trip insurance providers is a nightmare.
10:17 Speaker 02 The industry loves to sell the product. They don't like to pay claims. So, yes, is it better to self-insure? Absolutely. But a lot of people take a big trip very rarely. And the idea of having to walk away from many thousands of dollars is a practical matter, the loss of that money. And then the second, the psychological thing. So, trip insurance is something that is more peace of mind. It may be false peace of mind. That's why I love the credit cards that give you trip insurance. They may be just as hard to file and successfully get your claim paid.
11:02 Speaker 02 But at least it just comes with the annual fee you pay for the card instead of having to buy a separate trip policy.
11:09 Speaker 03 Britt in South Carolina says, Clark stinks like the smell of all the old money I've been saving, thanks to the benefit of his knowledge over the years. I heard him talk about the United States Census in the past, but somehow missed the part where he mentioned it's a multi-year commitment. I am on year two. The first year, it took close to four hours to answer the questions. This year, it was almost two hours. My Census worker says I likely have two more years on my Census sentence. I'll say that four times. I can see why people...
11:39 Speaker 02 Census sentence. I'll say it once.
11:41 Speaker 03 Okay. I can see why people try to avoid participating. The worker explained it's a multiple-year process so that they can spot any trends in your answers indicating shifts in the economy and such. Continued health and wealth to you and your team and all of the Clarkies.
11:55 Speaker 02 So, I get the ones for my companies every single year. It seems forever. And when I don't do it, they start really hassling me. I just take the time and do it. And this year, I'm so used to it now. It took me under an hour this year to do it. But it's just like so detailed what they want to know. And yes, the one that I get is different than one that when an individual gets a community survey, this one's really trying to gauge the weakness or strength of small
12:37 Speaker 02 businesses in the US is best what I can tell from the details they're asking me.
12:44 Speaker 03 Alex in Georgia says, "You both stink here."
12:46 Speaker 02 Oh.
12:46 Speaker 03 "Someone with a revocable trust wrote in about something and you claim, you both claimed, chimed in about how you need to give trusted people all your passwords so they can get into your accounts. There's a procedure for dividing assets or transferring accounts to heirs that is fully taken care of with a trust. Moving any funds after a person's death and before those accounts have been properly executed by the trustee is theft. The trust determines who gets what, and it's nobody's right to go in unauthorized and do anything with the assets in the trust. Having the trust will greatly expedite the process and save money in the end on probate court fees and lawyers."
13:22 Speaker 02 All right. Thank you for this. Now, I don't remember the specific content that this individual's posting about. What was it?
13:31 Speaker 03 Alex in Georgia.
13:32 Speaker 02 Alex. So what we're both obsessed with is when people die and we keep hearing stories about how family members can't get in any of their accounts, from their email to anything else. And so that's why having some arrangement with people you, as best you know, you know you can trust, where they can get access to accounts. How about a grieving spouse who can't even get into a bank account, or can't get in to pay bills, or whatever it is? A lot of times in couples, this information is mañana, mañana. You know, we'll share it later and...
14:12 Speaker 02 Later never happens. So that's why this is something I think is important for us to talk about. And thank you for the angle about the trust.
14:21 Speaker 03 Mike in Washington says, you're correct that crypto is not an investment. You missed the real dangers of using crypto as an investment. It was created to mask illegal financial transactions like drugs, money laundering, and human trafficking. The real threats to crypto are governments and the underlying technology. When central banks create their own digital currency, do you think governments will permit private digital currencies? If quantum computers become viable and the underlying cryptography of cryptocurrency will no longer be secure. And yes, the underlying value of crypto is pure speculation, not an underlying business that makes money.
14:57 Speaker 02 So, all right. So let me say this. Crypto, the whole idea of it originally was a libertarian kind of thing, where there were a lot of people who didn't trust government issued money anymore because it's not backed by anything. And so crypto became a thing. But the way it's been used in practical purposes is by fraudsters, scamsters, drug cartels. I mean, it's had a lot of really, really illegitimate uses. That's absolute fact. Now, the big buzz at the moment, and I'm surprised we haven't had any questions about is stable coins. The idea that they're directly backed by, guess what, government issued money.
15:42 Speaker 03 Yeah, well, that's the thing, yeah.
15:44 Speaker 02 Government issued money. But the problem is, there's no FDIC insurance. And if a stable coin turns out not to have the backing promised, there's nobody you're going to go to to get your money back. Crypto is still an infant at this point.
16:03 Speaker 03 Andrew in Iowa says Clark smells a bit like a trash bag that's been sitting outside as we approach the hot summer. Someone wrote in asking if they should get 529 for their own benefit as this writer will likely return to school in the next few years. For tax benefit reasons, saying yes is not a bad thing, but the time horizon should be considered. That return to school isn't decades away. It's coming very soon. An ill-timed investment in the stock market could leave him with less money than he had to begin with. The good news is that 529s often offer non-stock strategies, but that probably was not mentioned. Shorter-term investments aren't always safe, especially when the market is near all-time highs despite global conflicts.
16:44 Speaker 02 Andrew, thank you. All right. So if somebody is about to enter school and all the plans now have age-based or expected enrollment options, which operate much like a CD from a bank, you eliminate the market risk you're talking about. And if I'm funding my own 529 for the purpose of going to school in the next couple of years, and I go in the expected enrollment thing, the market risk is gone, but the benefits remain of whatever growth there is being tax-free, and in so many states, having a tax benefit
17:29 Speaker 02 directly for contributing to a 529, which makes the 529s such a superior choice because with the state incentives to put money in, then the money grows tax-free, is spent tax-free on education. And remember, for tax-planning purposes, the fact that you can put money in a 529 not worrying about whether, let's say you're doing it for a child, that child's going to go to college or not, that that money up to, under current law, 35 grand can be moved tax-free into a Roth. And you could have theoretically a newborn, you open
18:11 Speaker 02 a 529 for, grows tax-free till they're a young adult. They say, no, college isn't for me. Then you move that money into a Roth IRA.
18:23 Speaker 02 The compounding of that money from birth to a time of retirement is unbelievable done when a kid is a single digit. So the 529 has become a phenomenal tool to put money aside for multiple purposes now versus how rigid they were and unfortunately, how expensive the investment houses made 529s when they first came out. Now they're a screaming deal tax-wise and investment-wise. Coming up ahead, I want to talk about something that's not been a screaming deal for a good while, and that's renting a place.
19:08 Speaker 02 But there's been a huge shift in the market you need to know about as a small landlord and as a tenant.
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21:27 Speaker 02 So this is a tale of two things. One, if you are someone like me, who's a small landlord, you have rental properties, or you're a tenant. So it's been a real opportunity for years and years and years to be a landlord of individual properties. And if you bought places long ago, it's been great. Right now, there's such a spread between what it costs to buy properties and what rents you can earn, that acquiring new rental properties right now, most places in the country is not going to work.
22:09 Speaker 02 The ones you have already, you may find, hey, there's opportunity in selling. I'm selling one of my rental properties right as we speak. It's going to close in the next few weeks. And that's because what I could get in rent, even though it was nice rent, didn't justify versus what I could sell that property for. So this is a time to see if you keep being landlord of a property you've owned a while, or you move on. But here's the thing as a tenant, so many apartments have been built in most of the country. And I always have to say to you, there are differences in certain
22:52 Speaker 02 local markets. And I'll just name three in particular. And this is not an inclusive list, but New York, Boston, Seattle, it's still a landlord's market, meaning there are more tenants looking for a place than there are landlords looking to rent. But most everywhere else in America, there's been so much apartment construction over the last, oh, 11 years. And there are so many new construction apartments in the pipeline, that even though everything pretty much being built over these last 11 years is higher end, and you're like, that's irrelevant to me. There's a new quote unquote luxury apartment
23:37 Speaker 02 building that's been built. The truth is, those new inventory units create new supply that filters through the various levels of apartments. It means there are deals out there. Most people miss the deals. And here's why. Moving is a pain in the rear end. I mean, moving is, is a terrible thing to have to do, right?
24:05 Speaker 03 It's the worst. It's the worst.
24:06 Speaker 02 Well, I'd say there's probably some things worse.
24:09 Speaker 03 Yes, I agree with that.
24:10 Speaker 02 It's awful having to move, right?
24:13 Speaker 03 Oh, my God, I'm being the exaggerator for once.
24:18 Speaker 02 So anyway, what's happening is if you look at what the apartment you're in is promoting as rent to new tenants?
24:33 Speaker 02 It's not unusual for it to be hundreds and hundreds and hundreds of dollars less per month than what you're paying. And they may even be throwing in free rent on top of it, or a free storage locker, or whatever, or an extra parking space, or who knows what to attract new tenants, because things are so overbuilt now in so many markets in the country, most markets in the country. And if you heard me talk about this a couple of times over the last couple of years, I want to reinforce that things are even more tenant-friendly today than I would have talked about in the past, but it requires two things.
25:16 Speaker 02 The biggest savings go to those that are willing to walk. And what's willing to walk mean? That means when your lease is coming up, and I want you, depending on what your lease's terms and conditions are, six to 12 weeks out, I want you shopping the market. And if you find a really great deal, you go to your existing landlord, because it's cheaper for your landlord to keep you than have to find a new tenant. And you say, hey, I love living here, but I've found all these other things. And if they say, well, that's nice, this is all we're going to offer you, if you're willing to walk, you get the greatest savings. By moving somewhere else where you did find rent that's much cheaper, a much nicer place,
26:01 Speaker 02 or whatever it is, maybe it's a bigger unit, whatever the circumstance. That's number one. Number two, if you're not willing to walk, you have to be willing to play the game of shopping around, having your landlord think you're willing to move, and then cut the best deal you can with them to stay. On the other hand, if you don't go shop the market, your landlord, even though they're offering all these deals to new people, may turn around to you and say, okay, this year we're only going to raise your rent 3% or 2% or 5%. While other people are being offered rent $500 a month, less than you're being offered.
26:44 Speaker 02 It's all about you being active, not passive.
26:50 Speaker 02 And you let the market work for you.
26:54 Speaker 03 You know, I have a friend who lives in an apartment complex and I thought this was so funny. The lease was coming up and, and the roommates were like, oh, we want to try to negotiate with the complex. And they were like, no, your rent's going up. Meanwhile, there's a sign every time they drive in that says a thousand dollars if you can help us find a new tenant. It's just so short sighted.
27:16 Speaker 02 That's the thing. But most people are creatures of habit, or what we were talking about right off the top, that the whole idea of moving
27:25 Speaker 03 Right.
27:26 Speaker 02 is so horrific. But again, the landlord doesn't know if you're willing to move. So you shop around and it's the competition that matters. And that's how you drive the best bargain for yourself.
27:40 Speaker 03 If you live in a complex, shop your own complex or building too. Like have somebody call or you call like you're inquiring as a new tenant and see what they're actually charging now.
27:48 Speaker 02 You know, I became such an advocate of this during the height of COVID, when our middle child was looking for an apartment. And right then, nobody wanted to live with somebody else. And so she was able to rent in the same development, a two bedroom for less money than a studio.
28:11 Speaker 03 Oh, my gosh.
28:12 Speaker 02 Because the big apartment chains use a dynamic demand pricing like the airlines do. And that's why, I got an annex to this in a second. But that's why looking, all of a sudden, I started hunting around. I found a little kernel there and I started looking around.
28:29 Speaker 03 You're on it.
28:29 Speaker 02 And I was looking at the studios, the one bedrooms, the two bedrooms. And the two bedrooms were cheaper than anything else because nobody at that point wanted the two bedrooms. And so she ended up by herself with this big two bedroom. When she was looking at first, at 520 square foot studios, she was able to get a two bedroom over a thousand square feet for less money, all because of how the databases work. So.
29:00 Speaker 03 And because her dad's Clark Howard. And it's on it. I love it.
29:04 Speaker 02 Well, speaking of the airlines, little thing about that. Okay. The airlines, the three full fare airlines, used to reserve their upgrades for people who are their highest status people. And you're on this upgrade list and you see if you make it. And you have, you have status on one of the big three, Delta. And how many times a year do you get an upgrade to the front of the plane, to first class?
29:32 Speaker 03 Oh, first class, like never.
29:34 Speaker 02 Never. Right.
29:35 Speaker 03 Comfort plus, I guess.
29:36 Speaker 02 Which is the just comfort. I call it comfort minus because basically it's a regular coach seat with three or four inches of extra legroom and they make it sound like it's some good big deal. Anyway, so the airlines now, all three of the full fares are selling upgrades to the front. And at the last minute, they are selling, if somebody's buying a ticket, they're selling them for whatever they think they can get. And there's an anomaly in the system you need to know. If you're trying to, at the last minute, you feel like the airlines got you right where they want you, they kind of do. Except, a lot of times, a first class seat will go for less money than a coach seat.
30:20 Speaker 03 Really?
30:21 Speaker 02 When you're buying a ticket because of the algorithms, the same kind of thing, doing the dynamic demand pricing.
30:28 Speaker 03 Interesting. My gosh. All right. I learn something every day too here. Let's go to questions. This is from Justin in Georgia. Speaking of travel. Hi Clark, my wife and I are going on a cruise as a party of eight in August out of Fort Lauderdale. We had tickets from Spirit Airlines booked with points, plus about $170 worth of money we paid for via an American Express card. What do you recommend we do for new tickets? It will be much more expensive as there's no points to pay this time. Surprisingly, Frontier is much more expensive now, even as an ultra low cost airline, if you want seats, which we will, with two kids on the autism spectrum, that's understandable. Also, should we dispute the charge from Spirit?
31:12 Speaker 03 But now despite the word that they will be automatically issuing refunds to cardholders.
31:17 Speaker 02 Yeah, don't trust the automatic refund thing. Anybody with Spirit tickets, you've got these charges with Amex. Dispute them with Amex and you sit on your hands, you lose your rights. So the dispute process online takes maybe two minutes. Finding your way to where you dispute the charge may take longer, but the dispute's really quick, really easy, you dispute them. Okay, the good news with Fort Lauderdale is airlines have been adding flights to Fort Lauderdale since Spirit shut down like you cannot imagine. So where are you going from? You're going from?
31:58 Speaker 03 Probably Atlanta.
31:59 Speaker 02 Atlanta. I don't know what new service is being added from Atlanta, but there's new service coming from all over the country into Lauderdale. If you go in on Google News or something like that and you search new routes out of Fort Lauderdale and you'll see, because the airlines all trumpet when they're adding service.
32:18 Speaker 03 But Google flights will show you too.
32:21 Speaker 02 Google flights will show you and set up an alert on Hopper. Now, August, we're not far away from when you're going. So you can't wait too long to book this. But the fares are, there was a big spike in airfares and the markets at Spirit was big in and Fort Lauderdale was one of the biggest. And now with all the new service going, it's kind of like the story I told about the bar scene in New Orleans. There was a fistfight and the band keeps playing. This is something I experienced 25 years ago. And house lights come on, the band's still playing, the bouncers come, they throw all these people out from the fight, there was two tables.
33:06 Speaker 02 And then we just, they were at better tables, we just moved to the better tables. That's what happens in the airline industry, you know, somebody goes away, somebody else comes in, fares at first go up, then they start to come back down. So I don't know that you have the luxury of time in this case.
33:27 Speaker 03 What about also looking at Miami? I know American does a lot of sales to Miami from Atlanta and. Delta, obviously, you know, so sometimes there'll be deals.
33:36 Speaker 02 Yeah, and there are times rarely that West Palm will be an alternative. But the craziest I ever did for a cruise was I could find a great deal to Fort Myers. And I flew into Fort Myers and we had a rental car and drove across the Everglades to Port Everglades to sail out in Fort Lauderdale. So it added like two and a half extra hours to the trip, but we saved a ton of money.
34:04 Speaker 03 Joseph in Oregon says, does increasing the credit limit on a credit line that has a zero dollar balance help my credit score? I understand that maintaining a 30% or less utilization rate on a card is ideal, but if there's no balance, does asking for a limit increase do me any good?
34:19 Speaker 02 Yeah, Joseph, it's your overall utilization that ultimately so heavily affects your credit score, not per card. So the more you have available credit, the better it is for you and your overall FICO score. So as you're able to raise limits on cards or a credit card company offers you a limit increase, you say, thank you. In your case, even with the zero balance, it's still useful. Now, the big problem that I keep hearing from people is out of nowhere, the credit card companies are cutting their limits and they've done nothing wrong.
35:02 Speaker 02 The reason for this is defaults on credit cards have been skyrocketing this year. The outstanding balances on credit cards are at all time highs and the big credit card issuers are starting to get really frightened with the amount of available credit they have out there. So credit limit increases are harder to get right now. And the other thing is what's happening more often, which is the letter you don't want to receive telling you they have decided to cut your limit with no warning, basically. They just do it.
35:36 Speaker 03 Gabriel in Iowa says, "I recently subscribed to Robinhood Gold mainly for the gold card that I was approved for, which is $50 a year. I decided this was smart because they offer a 3% match for new contributions if you have your IRA with them and a 1% match on transfers. This pays for the membership by itself. I was under the impression that this match counts toward your total contribution limit. However, it does not, and they specifically state in their terms that the 3% match is on top of whatever you put in for the year. So if you max out your IRA with $7,500, you're essentially putting in 77.25." That was for 2025 limits. "I dug around and apparently companies managing your IRA are
36:18 Speaker 03 allowed to give you bonuses directly into your IRA without it counting towards the total contribution limit. Another example being if you get the Amex Platinum through Schwab and redeem your rewards directly into your IRA. How on earth is this legal? This seems like a huge loophole. What's stopping a company from just offering a $500 a year membership with the promise of giving you a bonus, wink, wink, of $500 directly into your retirement accounts to get around the contribution limit? Seems like a huge oversight in the law, no?"
36:47 Speaker 02 Okay, this is funny because no one's asked me about this in years, but I guess with the Robinhood Gold program, we're going to hear more about it. All right. So yes, you can violate the normal limit on contributions to an IRA per year, Roth IRA per year, traditional, almost nobody should be doing traditional. Anyway, you can violate those limits if the company you have your IRA with gives you a bonus, is looked at as like bonus interest or bonus earnings or whatever, not a contribution, even though that's effectively what it is.
37:30 Speaker 02 It's a loophole, as you said, but really you think about it, it's more like what we've got with 401Ks, where you're allowed to contribute so much and then an employer can provide a match. Same idea, but much more seldom with an IRA. But it is in fact a valid over contribution, if you will, that you don't get in any trouble for, you only have benefit from. And I want to thank you so much for joining us today on a very important day in US history. This is the day my middle brother Neil was born. I mean, you'd think I'd be talking about tomorrow, you know, D-Day, June 6th.
38:14 Speaker 02 Nope, June 5th, my brother Neil's birthday. Happy birthday, Neil. Hope it's a great birthday for you. Sorry, we're not with you on your birthday. And anybody else who's lucky enough to have a June birthday like my brother, like I have, what a great month in the northern hemisphere to have a birthday. Warm days, long days, lots of sunshine, and I just love that. So know what we're about, whether it's June or it's December, like my poor wife, Lain, born in December, on the day of the year with the earliest sunset. Sorry, honey.
38:58 Speaker 02 I want you to know every day of the year what we're about is your empowerment with knowledge so you can save more, spend less, and absolutely never, never, never, not ever get ripped off. You go enjoy your weekend, know we serve you all weekend long with empowerment at Clark.com and ClarkDeals.com. And see you Monday.
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