The Clark Howard Podcast – Episode 03.03.25: The Consumer Financial Protection Bureau & Warehouse Club Competition

Release Date: March 3, 2025

In this insightful episode of The Clark Howard Podcast, Clark and his co-host delve into significant topics impacting consumers today. The discussion primarily revolves around the Consumer Financial Protection Bureau (CFPB) and the evolving warehouse club competition, particularly between Sam’s Club and Costco. Additionally, Clark addresses a series of listener questions, offering expert advice on various financial and consumer-related issues.

1. The Consumer Financial Protection Bureau (CFPB)

Timestamp: [00:44] – [07:13]

Clark Howard begins the episode by expressing his deep concern over the current challenges facing the CFPB. He emphasizes the bureau's crucial role in safeguarding consumers against malpractices by major financial institutions.

• Clark Howard: “The Consumer Financial Protection Bureau is something I really believe in. I was an advocate of its creation… It gave you as a consumer a place to go to get help if you were having a problem with the bank that was ignoring you…”

He critiques the recent attempts by influential figures like Elon Musk to undermine the CFPB, arguing that such moves could leave consumers without a necessary safety net. Clark highlights the bureau's effectiveness in the past, citing its role in fining companies like Cash App for systemic issues that harmed consumers.

• Clark Howard: “Having an ability to file a complaint like you can@consumerfinance.gov… It is an organization that a lot of people have really benefited from. But now if you go to their website, it's almost non-functional…”

He laments the potential extinction of the CFPB, pointing out that without it, consumers are left vulnerable against the overpowering presence of the four major U.S. banks: Chase, Citibank, Bank of America, and Wells Fargo.

2. Warehouse Club Competition: Sam’s Club vs. Costco

Timestamp: [18:07] – [22:58]

Transitioning to the retail sector, Clark shares his enthusiasm for warehouse clubs, particularly focusing on the dynamic rivalry between Sam’s Club and Costco. Historically, Costco has been the leader in this space, renowned for its exceptional customer service and high-quality merchandise.

However, recent developments have seen Sam’s Club leapfrog Costco in terms of customer satisfaction:

• Clark Howard: “According to the American Customer Satisfaction Index, Sam's Club has blown past Costco on customer service. Costco's customer service has not declined. Costco remains at the very top… But Sam's has blown past it and has.”

Clark attributes Sam’s Club’s success to innovative leadership and technological advancements. He highlights features such as the Plus Membership with free delivery and the integration of AI-powered checkout systems. These innovations have significantly enhanced the customer experience, making shopping more convenient and efficient.

• Clark Howard: “With the app, you ring yourself up. Because they have 8 million cameras hooked up to AI… you now in most cases don't even have to show a receipt… you just walk right out of the door.”

Despite Costco maintaining superior merchandise quality, Sam’s Club has excelled in customer service and operational efficiency, positioning itself as a formidable competitor in the warehouse club arena.

3. Listener Questions and Expert Advice

Throughout the episode, Clark fields a variety of listener questions, providing detailed and practical solutions.

a. Credit Card Processing Fees

Listener: Ryan from Alaska
Timestamp: [07:13] – [10:17]

Question: Are merchants allowed to claim credit card processing fees passed onto customers as business expenses, potentially leading to double-dipping?

Clark’s Answer:

Clark clarifies that merchants are not double-dipping. When a merchant adds a surcharge (e.g., charging $103 for a $100 service), they report the total ($103) as revenue and the additional fee ($3) as a business expense.

• Clark Howard: “When a merchant charges you... they're reporting revenue on their taxes of 103. As far as you are concerned, it's $100 for the service, $3 for the surcharge… they're reporting gross revenue and the processing fee as an expense.”

He also references international practices, noting that places like Australia have similar fee structures, often with transparent and minimal surcharge amounts due to high transaction volumes.

b. Returning an Unopened Item to Temu

Listener: Tony from Georgia
Timestamp: [10:26] – [12:09]

Question: Difficulty in returning a high-value item to Temu, a Chinese seller, with no effective customer service.

Clark’s Answer:

Clark advises using alternative contact methods like elliot.org to reach Temu’s customer service. If unsuccessful, he suggests initiating a chargeback through the credit card issuer as a last resort.

• Clark Howard: “Your only other option is to do a chargeback… which is ultimately what they were talking about to you…”

He warns about the risks associated with international sellers like AliExpress, where consumers often face challenges in obtaining refunds or resolutions.

c. Maximizing Credit Card Points for Large Purchases

Listener: Jay from Georgia
Timestamp: [13:13] – [16:25]

Question: Best credit cards to use for purchasing $40,000 in plane tickets to maximize travel points.

Clark’s Answer:

Clark recommends opting for premium travel credit cards that offer substantial sign-up bonuses and high reward rates on travel purchases. He suggests the American Express Platinum, Chase Sapphire Reserve, and Capital One Venture X as top contenders.

• Clark Howard: “You want to look at the big three of the travel cards… American Express Platinum… Chase Sapphire Reserve… Capital One Venture X… see which one has the best sign up bonus right now…”

He emphasizes leveraging these cards for large transactions to accumulate significant points, which can translate into substantial future travel savings.

d. Cash-Free Payment Options for Teenagers

Listener: Lucas from Washington
Timestamp: [23:22] – [25:56]

Question: Safe, cash-free payment options for a 15-year-old, avoiding the risks associated with debit cards.

Clark’s Answer:

Clark recommends using digital wallets like Apple Pay or Google Wallet as safer alternatives to traditional debit cards. These platforms generate randomized codes for transactions, mitigating the risk of fraud.

• Clark Howard: “Use Apple Pay or Google Wallet… it generates a randomized code that is useless to a criminal and bypasses the scammer.”

He advises against using debit cards at vulnerable points like gas pumps, suggesting contactless payment methods instead to enhance security.

e. 401(k) Participation Limitations

Listener: Sutton from Pennsylvania
Timestamp: [25:56] – [29:54]

Question: Facing restrictions on 401(k) participation due to income limits and seeking ways to maximize retirement savings.

Clark’s Answer:

Clark explains the regulatory background that restricts high-earning employees from participating in certain 401(k) plans to ensure non-discriminatory benefits. He advises Sutton to:

1. Utilize Roth Accounts: If eligible, contribute to a Roth IRA for favorable tax treatment.
2. Open a Personal Investment Account: Invest in diversified index funds or ETFs with tax-efficient strategies.
3. Leverage Long-Term Capital Gains: Benefit from lower tax rates compared to traditional 401(k) withdrawals.

• Clark Howard: “Take that money you would have put in the 401k… put it in an investment account… long-term capital gains have a much lower tax rate…”

He underscores the importance of proactive investment management to compensate for limited retirement plan options.

f. Car Maintenance Advice

Listener: MP from Connecticut
Timestamp: [29:54] – [31:51]

Question: Conflicting recommendations on oil change intervals for a Volkswagen car driven 20,000 miles annually.

Clark’s Answer:

Clark advises strictly adhering to the vehicle’s owner’s manual for maintenance schedules, rather than external recommendations. He emphasizes the importance of:

• Following Manufacturer Guidelines: Use the specified oil type and change intervals as recommended.

• Documenting Maintenance: Keep records to support warranty claims if needed.

• Clark Howard: “Go by the owner's manual… do that and keep records of it. If there's ever an issue involving a warranty claim…”

This ensures the vehicle remains in optimal condition and preserves warranty coverage.

Conclusion

The episode concludes with Clark reiterating his commitment to empowering listeners with financial knowledge and practical advice. He encourages continuous engagement through various platforms like YouTube, radio, and his websites (clark.com and ClarkDeals.com), emphasizing the mission to help consumers "save more, spend less, and avoid getting ripped off."

• Clark Howard: “It's all about empowering you with knowledge so that you can save more, spend less, and avoid getting ripped off. And see you next time.”

Key Takeaways:

1. CFPB’s Vital Role: Protects consumers from financial misconduct; its weakening could leave consumers vulnerable.
2. Sam’s Club vs. Costco: Sam’s Club has recently surpassed Costco in customer satisfaction through innovation and superior service.
3. Practical Financial Advice: From optimizing credit card rewards to safe payment methods for teens, Clark provides actionable tips.
4. Retirement Planning: Alternative strategies are essential when traditional 401(k) options are limited due to income restrictions.
5. Consumer Vigilance: Following manufacturer guidelines and leveraging digital tools can safeguard against financial and consumer pitfalls.

This episode of The Clark Howard Podcast serves as a comprehensive guide for listeners navigating the complexities of financial protection, retail choices, and everyday consumer decisions.