Pod Insights The Clark Howard Podcast 12.11.24 Tariffs And Car Prices / Store-Branded Credit Cards About this episode Today, Clark discusses tariffs and the potential for rising car prices. So should you pull the trigger and buy now? Also, you may be tempted to get a store credit card while holiday shopping. Know why Clark is adamantly opposed to this form of “junk credit”. Tariffs And Car Prices: Segment 1 Ask Clark: Segment 2 Store Credit Cards: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Clark's Christmas Kids 2024 Should You Ever Lease a Car? Best Secured Credit Cards for 2024: Top Picks for Building or Repairing Credit My 7 Rules for Using Credit Cards - Clark Howard Best 2% Cash Back Credit Cards: 11 Options for 2025 5 Sneaky Ways To Improve Your Credit Score How Dividing Your Monthly Credit Card Payment Speeds Up Your Payoff Date Warning: Why You Should Never Buy Visa Gift Cards Is Turo Legit? 5 Things To Know Before You Use It 5 Things to Know About the Costco Car Rental Program Clark.com resources Episode transcripts Community. Clark.com Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:00 Speaker 00 Progressive's Accident Response can contact emergency services if you're in a major accident. The only thing worse than someone you love being in an accident is not being able to help them. So Progressive is here to help when you can't. So get peace of mind knowing your loved ones are protected with Progressive's Accident Response. Learn more at progressive.com. Progressive Casualty Insurance Company and affiliates. Limited availability in California. Driver is responsible for emergency and towing charges not covered by the policy. Coverage subject to policy terms and conditions.
0:30 Speaker 01 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
0:42 Speaker 02 Price and participation may vary. Promotion pricing may be lower than meal pricing.
0:50 Speaker 03 It's great to have you here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. And I want to thank everyone who's donated already this year to our Clark's Christmas Kids campaign. This is our 34th year collecting your donations for children who are in foster care. You can see more about it if you're not aware how this works. Where you actually buy one of the three gifts, or two, or three, that a young child in foster care has actually wished for. So you know the kid's name, age, and male or female,
1:35 Speaker 03 and what they'd love to have this Christmas season. So they know even though their parents couldn't take care of them, that an absolute stranger cares about them, loves them, and wants them to have a Christmas morning like other kids get. And if you go to clark'schristmaskids.com, you can see it, or just at Clark.com, we've got information right on our home screen about Clark's Christmas Kids. So I hope you'll consider donating whatever you can. You can either buy gifts for an individual child, or just give us some money and we'll buy for that child. Now, here's something I'm getting so many questions about. All the talk about tariffs, tariffs, tariffs.
2:20 Speaker 03 When President-elect Trump goes back into the White House next month. So, there's a big pitch going on in ads about how you better hurry up and buy a car right now, right now, right now, before the tariffs. So, I'm gonna tell you what I think about all that. And also, if you've listened to this show for a while, you know I despise store credit cards. And I've got one more reason that you should hate them as much as I do, that I'm gonna share with you later in this podcast. Okay. President-elect tariff, I mean Trump, has talked over and over again about how he's
3:02 Speaker 03 gonna tariff everybody in the world on everything. And if you think back to the first Trump administration, President Trump repeatedly would talk about what he was going to do, and the bark was always much worse than the bite. And the reason is, is that everything about him is being a real estate developer, everything's about telling the big story, and using it as a bargaining chip. So, if President-elect Trump actually imposed tariffs like he's been making noises about,
3:45 Speaker 03 it would be brutal for our economy and brutal for the world. All you gotta do is go read the economic history of the 1930s, and you'd understand how harmful widespread, universal tariffs actually are. I believe, and I could be proven wrong, but all the hype about the tariffs is really about trying to tell other countries and manufacturing facilities that if you don't play a game that feels reciprocal, then we're gonna tax you into oblivion with tariffs. That's all a tariff is, it's a tax on consumers on goods they buy. So, are there gonna be some tariffs?
4:30 Speaker 03 Yeah. Are some items going to get more expensive because of that? Yes. But tariffs are not a dollar-for-dollar-as-a-percent-of-purchase increase in an item. And I will tell you upfront, I don't like tariffs. I am the last of the ardent free traders.
4:50 Speaker 03 I believe that the whole world becomes wealthier if you just allow the free movement of goods and services. That's my thing. But obviously, that is out of tune with the times and how people feel about our economy versus competing with others. And so there are going to be some tariffs, but it's not going to be anything like the bluster that we've heard from President-elect Trump. So, all this hype that you should run out right now, right now, and buy a brand-new car before the Trump tariffs, don't buy into that. Don't be sucked into it.
5:31 Speaker 03 Because I've noticed that some vehicles are now pricing higher than they were before the November election. Because dealers are looking at the psychology of the market and they think, "Hey, I'm going to be able to charge more right now because of this whole thing of getting in people's minds that there's this shortage coming," shortage meaning because of the prices, "and you gotta buy, buy, buy, buy." The marketplace is going to be fine. And in fact, the truth is, most new vehicle brands are overstocked at this point. And tariff, no tariff, you as a consumer have more power buying a new vehicle than you've
6:16 Speaker 03 had in years. So, let the politicians and the media hype the tariffs. Don't let them change your behavior.
6:26 Speaker 04 All right, I got a few car questions for you here, Clark, to go with that. Renee in Florida says, "After hearing Clark speak about new and used car prices, I wanted to hear what he thinks about the current new car incentives specifically in leasing."
6:41 Speaker 03 So Renee, anytime we talk about leasing, it's a question first of what's your intent? Do you tend to own a car a long time? Do you tend to buy that vehicle and have it, I would consider, a long time? Five or more years in the mentality of how long people keep new cars. If you do, as a general rule, you're better off buying rather than going through a lease. Because then what happens is at the end of the lease, you have to then either turn that vehicle back in, or go through the purchase process as already negotiated in that lease.
7:26 Speaker 03 Now, there are times with certain luxury brands, or near luxury brands, where they use a lease as the backdoor method of discounting. In those circumstances, as long as the residual value looks like it's going to be a deal, that's the price that you can buy it at in three, four years, usually three years. As long as you prepare yourself to buy it at that point, then it's a backdoor way into you ultimately having a lower cost of ownership. But you're asking for a lot of complexity going into a lease, and a lot of fees that you really may not have been prepared for.
8:07 Speaker 03 And so leasing is something that, eh, but if you like to cycle through vehicles in three, four years' time, and there's special incentives on the leases, go for it.
8:20 Speaker 04 Saw a lot of Black Friday lease specials advertised when that was going on.
8:24 Speaker 03 Oh, yeah. I mean, well, you know why all these leases? Because the manufacturers have been able to get a little bit lower cost of funds that they can use for these leases. And they've got too much product and a lot of models on the lots.
8:39 Speaker 04 Right, and the year's about to, the 24s are going to be cheaper because that year's about to turn over.
8:45 Speaker 03 Yeah, the 25s, a lot of dealer lots have 24s when the 25s should already be what they've got on their lots. And they got the 24s that the manufacturers need to push out the door, as do the dealers.
8:58 Speaker 04 All right, Suzy in Oregon wrote in with this. I have a 1995 Honda Accord with 230,000 miles on it.
9:06 Speaker 03 All right, Suzy, you're just about my hero here. 30-year-old, 30-model-year-old.
9:12 Speaker 04 Yeah.
9:14 Speaker 03 Uh, cause of what we were just talking about that the 25s are out. I love that. 30 years, 230,000 miles a year driving, less than 10,000 miles a year. Wow.
9:25 Speaker 04 I'm the original owner. It has been a great car, but recently has required some costly repairs. The fuel pump went out and it cost $1,300 to replace. I'm starting to regret having the fuel pump repaired since I don't think the car is worth very much. My question is, should I try to sell the car to recoup the repair money or donate it to PBS, for example, as a tax write-off? The car is in good working order now, but it's probably only a matter of time before it breaks down again. What should I do?
9:55 Speaker 03 All right, Suzy, I love this. You are really, really thrifty. So you've been driving this as the original owner for roughly 30 years. Unbelievable. And if you are tired of this Honda, you want to get something newer or a brand new vehicle and you can afford to do so, go ahead.
10:18 Speaker 04 You're gonna feel like you're driving a spaceship if you get a new Honda.
10:20 Speaker 03 Yeah, because the tech, the technology changes in 30 years. Unreal. Okay. So if you want to get rid of it, go ahead. But from a straight financial standpoint, if other than having to replace the fuel pump, the vehicle's still working fine, you will make up that cost. The average new vehicle costs nearly a thousand dollars a month, all in. Payments, everything like that. So you make up that $1,300 repair in about six weeks, five weeks. I mean, no time flat. So don't feel bad that you spent that money. And as far as selling that vehicle,
11:04 Speaker 03 it's worth more than it would have been if you hadn't replaced the fuel pump. So it's not like net, you paid a full 1,300. So if you are done with the vehicle, sell it. If you want to donate money in the semi-annual fundraising drive for whatever PBS station or whatever you want to
11:24 Speaker 03 Give money to, you'll give them more money if you sell that Honda and take the proceeds and give it as a charitable donation than you would donating the vehicle because it still works, because you've already done the repair. And believe it or not, that vehicle has more value than you realize even as a 30-year-old vehicle because Honda Accords, Toyota Camrys and Corollas maintain such crazy value year after year after year.
11:52 Speaker 04 Anita in Georgia says, "I have a one-year-old Nissan. I've read that Nissan may go out of business in the next year. Would it be in my best interests financially and car-wise to trade to another brand and avoid the issues that a dealership that is no longer around may occur? My Nissan is in pristine condition with 10,000 miles on it. It hasn't been in any accidents and maintenance has been kept up with. I don't want to lose too much value should Nissan go out of business."
12:18 Speaker 03 So Anita, the way the Japanese automakers work is when one of them gets into serious financial trouble or insolvency, the Japanese government engineers a takeover by another Japanese auto brand, or another Japanese auto brand will do some level of investment for partial ownership of the brand. It would be extremely unlikely, even with Nissan's been a long-suffering brand, and for a long time was controlled by the French, and that was only undone in recent years. But Nissan has had a long, long time of trying to find
13:01 Speaker 03 its way financially in a very competitive automotive market. So I would be beyond shocked if Nissan's financial difficulties led to a shutdown of the company and a dissolving of the brand. Owning something for a year, you've already taken a big depreciation hit in that first year of ownership. The vehicle's working fine for you. I would not make a change like that, dumping the vehicle, because I don't think that your scenario you're worried about is likely at all.
13:39 Speaker 03 It would be very, very extremely remote that a possibility like that would occur. And coming up ahead, I want to talk about something that I have consistently just hated, and that is store branded credit cards. And they've actually managed to get worse than they already were. And I'm going to tell you why. When they say, "Wouldn't you like to save 15% today?" The answer is, "No, I'd rather pay 15% more." And maybe the cashier who says it like a robot will look up, "Really? You want to pay more? I'll tell you why."
14:25 Speaker 00 Progressive's Accident Response can contact emergency services if you're in a major accident. The only thing worse than someone you love being in an accident is not being able to help them. So Progressive is here to help when you can't. So get peace of mind knowing your loved ones are protected with Progressive's Accident Response. Learn more at progressive.com. Progressive Casualty Insurance Company and Affiliates. Limited availability in California. Driver is responsible for emergency and towing charges not covered by the policy. Coverage subject to policy terms and conditions.
14:54 Speaker 01 Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
15:06 Speaker 02 Price and participation may vary. Promotion pricing may be lower than meal pricing.
15:09 Speaker 05 Host Thanksgiving with industry-leading quality standards from Whole Foods Market. There are no antibiotics in their meat department, ever. So carve up turkey and spiral cut ham with peace of mind. Shop organic sides like stuffing mix and cranberry sauce from 365 brand. And guess what? All their delectable pies are made with no high fructose corn syrup. Gourmet Thanksgiving flavors with the quality you want, only at Whole Foods Market.
15:38 Speaker 06 They're running a Cover 2 defense. But you're running to get game day deals on Uber Eats. Keep everyone at tonight's watch party fed with deals from your go-to restaurants. Or stock up with deals on your favorite snacks and groceries. Whatever the occasion, get game day deals on Uber Eats all season long. It's not football without food. Uber Eats. Order now. Terms apply. Product availability varies by region. See app for details.
16:09 Speaker 03 So one of the jobs that Krista had when she was growing up was folding khakis at the Gap. What was it used to say when people would come in?
16:18 Speaker 04 We'd tell them the different types of khakis we had. We had flat front, pleated. We had all different styles of khakis. And I folded t-shirts. It was a lot of folding. Because people would come along and they'd just mess up your table.
16:33 Speaker 03 It's funny, at Costco where they have two people whose only job is to refold clothes, that shoppers like me pull something up, we look at it, then we try to put it back into shape. It looks terrible.
16:46 Speaker 04 I refold very well because of my past experience in retail, for sure.
16:52 Speaker 03 Well, there's something about the Gap. What would you say?
16:55 Speaker 04 Oh, I worked at more than the Gap. I worked at a lot of stores, yeah.
16:57 Speaker 03 But you'd say, welcome to the Gap. Welcome to the Gap. Welcome to this. The New York Post reports that the Gap is one of the retailers that for their crummy store credit, they're all crummy, by the way. Any store, what's called a monoline credit card, I'll explain what monoline is in a second. They're all garbage.
17:16 Speaker 04 Except Target gives you 5%.
17:19 Speaker 03 We'll get to that.
17:20 Speaker 04 Okay, I just want to make sure.
17:21 Speaker 03 Okay. So, the interest rate on the Gap card is 35%. And there are a number of clothing retailers that are 35% on their store cards. Some credit card issuers now for store cards, monolines, 36%. In fact, 35, 36% has become common. The New York Post reports that 50 different retailers, this fall, as interest rates were going down, hiked the interest rate on their store cards by a bunch of points. So, what's the difference between a store card that's a monoline
18:03 Speaker 03 and a store card that would be, in my book, not junk credit? A store card that is tied in with a major issuer, where you can use the card anywhere, that may not be a good card to carry, but is not junk credit. But if you have a card that is only for that retailer, you've got junk in your hands. It's looked at as junk by credit issuers, by the credit scoring models.
18:32 Speaker 03 I mean, they're just terrible. Macy's is one of the companies that raised their store cards well into the 30s. So you say, oh, well, they're giving me 10% off on everything if I use my blah, blah, blah store card. But if you're then paying 35% interest, are you actually saving money? The answer is no, you're not. The only people who benefit are the people who like to shop at that retailer, want the discount, and then pay the balance in full on the card while they're in the grace period and there's no interest.
19:13 Speaker 03 Everybody else is being played as a sucker. These store cards are a poison in your pocketbook, and I don't want you to carry them because now not only do they reflect as poor types of credit that you carry, but now the interest you're paying is obscene. Think about the average credit union in the United States charges about 11% on their credit cards, average bank about double that, and then the store cards are triple what the credit unions charge on average. Triple. Do you want to do that to yourself? My answer is no. What's up, Krista?
19:58 Speaker 04 All right, we'll go to questions. This one came in from Chaz in Georgia. Hi, Clark, I have a few credit questions. I've been rebuilding my credit over the last 14 months. I started with a Chime debit and secured credit card and Quicksilver card from Capital One, following the guidance on your website. Also, I had to take out a personal loan right at the time I started to build my credit, and it went from my credit went from a 345 to 755 credit score in my loans.
20:24 Speaker 03 Wait, wait, wait, wait. In a year?
20:27 Speaker 03 Okay, I gotta tell you, that is the most extreme improvement in credit score in a year I think I've ever heard from a listener or viewer. That is exceptional and that is very, very impressive on your part. If I were to speculate, and I'm only speculating here, there may have been some older items, some charge-offs or whatever on the credit report that aged out and are no longer on there in addition to you building a current good credit record, but that is extraordinary and you should be really proud of your credit
21:07 Speaker 03 score. I didn't, no one could go as low as 345 and now 755. Excellent.
21:13 Speaker 04 Yep. Okay, and so Chad said, went from 345 to 755 credit score and my lines of credit have doubled twice since. A long time goal of mine was to get a Southwest card so I could rack up points for flights. Finally, I was approved last week for it with a $2,000 credit limit.
21:30 Speaker 03 Congratulations to you.
21:32 Speaker 04 Having the one unsecured card, I did my best not to use more than 30% of the credit limit of that card and just for bills. Now that I have two cards, do I have to stay below 30% on my credit lines collectively or do I need to stay under the 30% for each card and under the credit limit? I plan on closing the Chime accounts and keeping the Quicksilver card. My goal is to make my Southwest card the main spender. What should be my next move once my credit doubles on the Southwest card? Should I keep the Quicksilver open for emergencies or should I move on to another line of credit that has better benefits and close the Quicksilver card?
22:07 Speaker 03 Okay. Gosh, that's a lot of questions all at once. So, Ches, I'm gonna do the best I can to run through them. The Southwest card that you had been seeking...
22:19 Speaker 03 And now you have, is only a good decision if you pay the balance in full every month on the Southwest card. When you're talking about credit utilization, keeping it below 30%, I can't tell from your question if you mean you're leaving a balance of 30% or your, uh, your high limit in the month is roughly 30% of your credit. But with the airline cards, the airline cards don't charge the crazy high interest of the store cards I was just talking about, but they do charge higher than normal credit card interest rates. And so it's really important with that Southwest card that you use it as a payment system
23:03 Speaker 03 and not as a borrowing card. In other words, that you pay the balance in full every month. Don't know what the interest rate is on the Quicksilver card. As to having the Capital One card, as your credit continues to rehabilitate, at some point Capital One is going to offer you another card. And they'll offer you one of the ones that they push very heavily that pays one and a half percent cash back. And when you get to that point, you want to convert your Quicksilver, if it's not earning any cash back, to a card that's earning at least one and a half percent back. You don't want to just reduce the number of lines you have. You want to at least have two from two different issuers. Right now you have the Southwest
23:47 Speaker 03 card from Chase, then you have the Capital One card. You want to maintain having at least two different cards from two different companies. Now, on your question of utilization, 30% is the absolute max of available credit you want to charge up in a month. Depending on the scoring models, they're either looking at individual cards, but usually they're looking at overall utilization. So as long as you never go above 30% in your overall amount of credit, you should be okay. But what I prefer for you to do is follow the methods we talk about on Clark.com where you send in payments regularly through a
24:28 Speaker 03 month before your statement closing date, and that will allow you to report a lower utilization rate because you get steadily below 30% utilization, your credit score goes even higher.
24:43 Speaker 04 Mike in Minnesota says, "A group of parents want to give our children's daycare teachers something extra for the holidays. The default suggestion is a Visa gift card. I tried to search your website to see why cash is best, but I could not find a great article. Please advise."
24:59 Speaker 03 I'm shallow breathing. I'm shallow breathing. The Visa gift cards have been a nightmare for people. As I've detailed in my TV work, as we've talked about here on the podcast and our YouTube show, the Visa gift card product has been a very vulnerable product. Where you buy the card, you give it to somebody, they're smiling until they're embarrassed or angry when they go to a store and try to use it and there's no money on it. This has been an Achilles heel of gift cards generally, but specifically, the Visa gift cards have
25:43 Speaker 03 had a terrible problem with criminals being able to empty those cards the second they're activated and the recipient who thinks they're getting, you know, 50, 100, whatever number of dollars, daycare teacher goes to use it and they're all excited and thankful for what you gave them. And then there's no money on the card because of the lack of security Visa has on their gift cards. And getting Visa to restore the money after their system has been compromised and that card has no money on it, well, you might as well go out and try to move a mountain by yourself. They're very difficult to work with. So, cash is
26:27 Speaker 03 king. Nobody's going to be able to compromise that $20 bill or $40 you give, or whatever amount of money it is you give. The money is rock solid, will be in that teacher's hand. He or she will be able to use that. The Visa card, though... Way too often is fool's gold ends up being worth nothing.
26:50 Speaker 04 Tony in Massachusetts says, my new company shuts down between Christmas and New Year's. So we're moving our annual trip to Naples, Florida from late January to December 25th to January 4th.
27:00 Speaker 03 Smart to fly on the 25th flying.
27:03 Speaker 04 Mm hmm. I assume.
27:05 Speaker 03 Okay.
27:06 Speaker 04 While I was able to find a decent, not great airfare, oh yeah, flying for sure. The rental car rates are outrageous for this week. I'm currently booked at just over $500 for the 10 days. Do I have any chance of getting a lower rate?
27:19 Speaker 03 Minor, you know, the rental car market is so intensely strong in Florida during those key Christmas weeks, Christmas, New Year's weeks that it is, um, I know this is going to be weird to say, but paying $50 a day during the Christmas, New Year's period is actually a lot lower than most people are paying. Now, is there a chance of you getting a lower rate? First thing I'd say is check Turo, T U R O. It's where individuals, it's kind of like an Airbnb for cars, rent their own vehicles out. And you may find a better deal on Turo.
28:00 Speaker 03 Turo has its own issues, but that could be a way for you to save a fair amount of money. And reshop your car rental rate a week out before your trip. So.
28:14 Speaker 04 It's a week out, just about.
28:15 Speaker 03 The 18th, well, no, one more week from now.
28:18 Speaker 04 Yeah, okay.
28:19 Speaker 03 Yeah, one more week.
28:20 Speaker 04 He sent in his question. I wanted to mention, I should have told you this came in like a few weeks ago. So I'm just getting through all the questions.
28:25 Speaker 03 Oh, great. All right. So Tony, since we were not an on time airline and you're hearing the answer later than you submitted, I want you to reshop it on the 18th and I want you to reshop on the 23rd. And see if there's a better deal. And if you're a Costco member. Set up through Costco Travel. Well, actually your regular Costco membership sign in works on Costco Travel. Now, sign into that, see if Costco Travel has a cheaper rate for you on that rental a week out or just a couple of days out. And I hope you have a great, great time in Southwest Florida. I love going to Collier County, Florida. I just hope that you
29:10 Speaker 03 have great, warm weather through that time you're there over the Christmas, New Year's holiday period. And we look forward to being with you tomorrow on the podcast YouTube show. And know what we're all about. You, learning ways to save more, spend less, and avoid getting ripped off.
29:35 Speaker 00 Progressive's Accident Response can contact emergency services if you're in a major accident. The only thing worse than someone you love being in an accident is not being able to help them. So Progressive is here to help when you can't. So get peace of mind knowing your loved ones are protected with Progressive's Accident Response. Learn more at progressive.com. Progressive Casualty Insurance Company and Affiliates. Limited availability in California. Driver is responsible for emergency and towing charges not covered by the policy. Coverage subject to policy, terms, and conditions.
Previous 12.10.24 What Is Mortgage Recasting? / Fast Food Innovations Next 12.12.24 Subscription Wrangling / Estate Planning in 3 Steps Page updated November 7, 2026 · transcript and summary are machine-generated
