Caller (6:45)

Are you ready for some questions?

Clark Howard (6:46)

I sure am.

Caller (6:47)

Okay. This came in from Noreen in Ohio. This is not a political question about the tariff issue. If Clark thinks tariffs are bad, I would like to know his opinion on all the other countries that have had ridiculous amounts of tariffs on the USA for many years, yet nothing is ever said about it. And a lot of people wrote in with this question.

Clark Howard (7:05)

Yeah, and it's a great question. And by the way, when other countries have tariff barriers is preexisted, they're not just targeted at the US they're all other countries that are exporting to them and they're the big loser in that country. It gives them lower economic growth. It means they have an inferior selection of goods at higher prices. And tariffs have been proven over the years to be the most harmful. Not to the country that would try to export to the country with tariffs. It's to the country that puts those tariff walls up their citizens and the country itself is harmed with lower economic growth. So I despise tariffs. I don't like tariffs in any case at all. China, though, I said any case at all. China is the big question mark because China is such a large exporter of goods. And there's a lot of allegations that China has engaged in since 2001 in unfair trade practices. What does that mean? That there are subsidies that the Chinese Communist Party has provided to certain companies to produce goods that without those subsidies, they would be selling the goods in the marketplace at a loss. That's why China is kind of a unique circumstance and situation. But as a general rule, countries that impose tariffs on us as an exporter selling goods to their country and their citizens or any other country selling as an exporter to them, the real loser is that country that imposes the tariffs. Period.

Caller (9:01)

Can I also ask you, because I had asked you about this and you sent me a Wall Street Journal article that did an explanation that some of the numbers were really about trade deficits. Is that right?

Clark Howard (9:10)

Oh, yeah. I mean, that's such the chart. Again, gosh, I don't want. We don't do a political show, but I have to point out that that chart that the president put up on, was it called Liberty Day or whatever that was coined by the White House? That chart was not accurate because it was also including in it trade deficit, but did not include current account deficits. All the rest did not include all the services. This United States is a service powerhouse to the world with real meaningful exports that generate enormous income for the country. And so the whole thing of like, well, we're going to do to you what you do to us was really not an accurate representation.

Caller (10:06)

And we'll put the link to the Wall Street Journal article, maybe that'll.

Clark Howard (10:10)

Or any publication is written about that.

Caller (10:14)

Allison in Georgia says I'm hearing the value of the dollar will likely decline. Is it a good idea to exchange funds in savings from dollars to another currency when this happens? Euro or pound?

Clark Howard (10:25)

So it's hard plan what's known as the Forex market. It's hard for an individual, unless you're an extremely wealthy individual or an institutional setting or something like that, to play the currency markets. And the President has stated his desire for the dollar to decline in value. And there are specific reasons for that that I'm not even going to get into right now. So the question of what the value of the dollar is going to be going forward versus other currencies becomes a tough game to play. How would I be playing it? It's what I said weeks ago that I have a meaningful part of my investment portfolio. About a third is, more precisely about 35% invested overseas. I've had that for a while. And so when the dollar was going up and up in value, that was hurting me, having roughly a third of my investments overseas. Now, if the dollar does decline, there's real benefit to me. It's part of spreading out your risks. And it's the easiest way for a consumer to play this. Now, I know there are people who use Revolut as a way to hold different foreign currency holdings, and Revolut's an affordable way to do it. But this is a pretty difficult game for an everyday consumer or investor to play.

Caller (11:59)

And this one came in from Viv in Florida. Being avid listeners to your program, we thank you for all the advice you've given us as we try to follow everything that's applicable to us. I'm 58, my husband's 55, and going through deja vu all over again. I was supposed to open a business with less than $50,000 back in May of 2020 when the pandemic hit, we canceled just before signing a lease. When everything shut down In March of 2020, we moved to Florida. Since then, last year, he was finally on board for me to pursue opening a business. So I stopped work while he works full time. For the past eight months, I've negotiated and put a plan together. And just today a draft for the lease was presented to me to sign to start this new business. We'll pull about $100,000 from our savings from CDs and high yield savings account. We'd be left with approximately $120,000 in our 401k which we understand is going to be volatile at this point and another 50k in CDs. We do have about 500k in real estate equity and owe about $400,000 on a mortgage. The business itself would have been a sure thing if the economy is normal revolving around family and kids leisure. However, with fear of a depression, our concern is that families will be limited to disposable income and this business would take a hit. I'm reaching out for advice as this has been eight months in the planning and all we have to do now is sign and go opening the doors. Am I crazy in starting something right now? Would you risk a new business today? If I do put this on hold, I risk losing a great site. Thank you tremendously so Viv.

Clark Howard (13:39)

There's never the perfect moment to be out there. As an entrepreneur there's always things that will cause self doubt. I believe that there's advantage starting a business during a time that people are pessimistic. Now the conditions of the economy are still strong. Leasing space right now is pretty expensive, the vacancy rates very low. It's really later in an economic cycle that conditions are more favorable to sign a lease and start a business. But I want to go back to something you said. Would it be terrible to start a business that is based on families being willing to spend discretionary income to come to your business? Because the possibility of a depression, the odds of a depression are very low. Even though if, if we did go into an all out extended trade war in the world, history shows that it has a great likelihood of leading to a depression. I don't believe that we're going to be in an extremely extended trade war that could lead to a depression. The uncertainty of today and whatever tariffs stay in effect for whatever period of time could lead to will lead to a slowdown in the economy and could lead to a recession. But that would not be a reason for you to not go forward. One thing though I do want you to think about with this business is you know, the cash it's requiring for day one. You have to have as part of your business plan and know how you're going to fund initial losses that with a new business opening up new location that you could cover six to 18 months of initial losses. It's even if the business ends up being a roaring success, it is common that you'll go through a period of time that you will have losses that you have to be prepared to cover as the business finds its way in the marketplace, finds its customer base and hits break even and then beyond. But I love the entrepreneurial spirit. I hear the fire in the belly and what you've said and I think if your overall finances feel good enough to do this at this time, go for it. Coming up ahead, advertising like crazy from the cell phone carriers right now. And the ads are very defensive in nature, not offensive. Why does that signal to me that there's real opportunity for you? I'm going to tell you straight ahead what you should be doing for your wallet.

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Clark Howard (18:48)

So the tone of cell phone advertising has shifted very heavily. If you watch the ads from AT&T, Verizon and T Mobile, they overplayed their hand. All three of them, pushed up rates so much on their customers and kept thinking, oh, nobody's going to notice this increase, nobody's going to notice that new fee, nobody's going to notice that we're taking away this automatic payment discount. Well, the cumulative effect, people are angry, they're frustrated. And you're not trapped, you are not trapped by the troika by AT&T, Verizon and T Mobile, the gang of three cell phone carriers. Because yeah, they've run those rates up on you, but today you have more alternatives than ever to kick them to the curb. Verizon so realizes they overplayed their hand, that they're doing all this defensive advertising about a three year price lock that's also a tweak. @t mobile for T Mobile, telling people they were in price lock plans and then said, just kidding, just kidding, we're raising your rates and life's tough, but is it really? You have so much more power than you realize. So many options other than being with this Big three. Even with the big three, you can go to one of their discount brands that they own completely. And it was funny because I've read all these comparisons recently about the new Ultra Premium plan from Visible, which now is marketed by Verizon, is Visible by Verizon and the new Ultra Premium plan from them is half of what the same cell phone plan is from Verizon. And it's the same thing just for half the money. But that's just one tool in the toolbox I've talked about. There are so many alternative brand names that are owned by particularly T Mobile and Verizon. AT&T has not played this game as hard. They have cricket but not much else in terms of where they own a discount brand. And so if you are risk averse but you hate paying too much money, this is where I'd have you looked at the brands that Verizon uses to discount, the brands that T Mobile uses to discount, These are ones they own. And then you've got, well, cricket for AT and T. What are you doing over there at, at&t anyway? Anyway, then below them you've got all the independents that buy wholesale network access from the big three, but cell coverage service at a much, much lower price. And then the wild card, growing like crazy. The cable monsters have gotten big time into selling wireless service because what they do is they concentrate only in markets where they have their cable monopoly. And they all change the terms and conditions for people who buy Internet service from them to where they have the ability to. You're paying them for your monthly Internet service, and then they steal part of that capacity from you to provide cell phone service to people around you. So they're getting double use. You're getting to use the Internet and they're using what you're paying them for to provide cell phone service to people around them. Yeah, that's why the cable companies can offer it so cheap. And then when you're traveling somewhere that they don't offer blanket coverage for Internet, they buy capacity from wholesale from the big three and then provide you with service at what are potentially great prices, especially if you already buy Internet service for your home from a cable monster. They then offer wireless service, cell phone service, mobile service, whatever you want to call it at a much cheaper price than you're now paying. Buying it from one of the three. Gang of three. AT&T, Verizon, T Mobile. Let's try that. The Gang of Three. And if you are fed up with how Verizon, AT&T and T Mobile are charging you these ridiculous prices for your monthly mobile phone service, we have a tool I'm really proud of@clark.com our phone plan finder. Where you find it is you go to clark.com phone plan finder and you can put in your exact situation and we'll be able to help you find your alternatives that can save you money. Now, I just bashed the gang of three, but I want to say something positive about Verizon. Verizon, for its most premium plan, is geared towards the most affluent of Americans, now has significantly improved international service included in the plan at no additional cost. And the only company that offers better for people who travel regularly than what Verizon has just done is Google fi, which is so far head and shoulders above everybody else for people who travel outside the United States. Nobody's close. Krista.

Caller (24:55)

All right. This came in from Frederick in Missouri. I just received notice from my cell phone carrier that the $5 quote unquote discount I have been receiving for being enrolled in autopay is ending in two weeks. Since I use a credit card, if I switch to ACH, then I will receive a $10 discount per month. Would you consider it safe to allow this company to draft my bank account each month via ACH. My bill is $76 a month. The extra $5 if I do nothing amounts to almost 7%. Thanks.

Clark Howard (25:27)

And otherwise you're going to get a 7% greater discount or close to it based on the math. You said if you go to ACH now, we're going to see more and more of this. And I was having so much fun there bashing at and T Verizon and T Mobile. But this is actually about the ongoing war with us having the highest credit card rates for processing credit cards for merchants accepting cards in the world. And so you're going to see more and more businesses that used to be able to pay with an automatic charge to your credit card now going to something where they say nope, no deal for you anymore, but if you let us do ach. So what you can do, if you're worried about the security of using automated clearinghouse where they just come in and debit from your checking account, you set up a separate account at not where you normally bank or credit union where you put money in there for various ACHs. It makes it easy for you to monitor what ACHs are coming out by having it in a separate account. And you don't bet the farm on no hacks or anything like that from achievements. With your regular account, you need to pay rent, pay mortgage, pay car payment, pay all your bills.

Caller (26:50)

Sean in Alaska wrote this one. I've got a Charles Schwab checking account and debit card that I opened in the past based on your advice and having no foreign exchange transaction fees and ATM fee reimbursements. I recall using it in Mexico exceptionally well in 2016 for my first wedding. But I was curious if this is still the case for that account and and why it wouldn't be listed in the top checking accounts on your website due to the international travel benefit.

Clark Howard (27:17)

Great question. And we really work hard on having that best checking account list. And the reason Schwab didn't make the cut, and by comparison Fidelity did, is Fidelity pays, at least at this moment, a much higher interest rate on the funds in the checking account than Schwab does for people who travel. And so I do full disclosure. I have accounts with Schwab, Fidelity and Vanguard, but I do my equivalent my checking my banking with Schwab. And that's because I do travel outside the United states at least 60 days a year. I'm not in the United States. And so having access to the free ATMs is very, very valuable. To me, not paying foreign currency junk fees. Extremely valuable to me. So even though I don't get the higher interest of a lot of the checking accounts we list on our Best Checking Account Guide, Schwab did not make the cut because of the lousy interest.

Caller (28:24)

They pay Shannon, Georgia says medical bills, HSAs and credit cards oh my Clark thanks to technology, the process to be reimbursed for medical expense from an HSA account is rather simple versus having to submit paper claims and wait for payments, etc. However, I want to ensure that I'm not missing something crucial. Rather than use the debit card provided by my HSA account, I am opting to pay my medical bills via my regular rewards credit card. If there's no upcharge since the process is a breeze, I simply log into my HSA and submit the claim request for the same payment. I always put the bill information in the notes so I can tie it back and it's transferred out of my HSA into my bank account in a matter of days. This allows me to get the rewards on my credit card but ultimately still use the funds for my hsa. Am I missing something in this process that I need to consider now?

Clark Howard (29:17)

Shannon, I love the way you think because you're playing both ends of this game. You've got your triple tax benefit hsa. You're getting the reimbursement from the HSA in a way that also earns you tax free cash back on a credit card. I mean that's really, really awesome. There is one thing more awesome than what you're doing though. Depends on how solid your funds are. The best thing to do with an HSA is not use it. Isn't that a stupid thing for me to say? I mean you have it for pre tax benefit to pay medical bills that aren't covered by insurance. So why would I say the best thing to do is not use it? Because the best advantage with an HSA is to have the money invested in an HSA with like I mentioned fidelity a minute ago as an option and you have it invested where it grows through the years, tax free. And then much later in life when you're going to have more medical bills that are not reimbursed, you're going to have that tax free money. You got the tax deal up front, putting money in it grows tax free. You spend it tax free. And so time is your real friend here. If you need the money, you need it to pay the medical bills. But if you don't, deferring using the HSA is even better than what you're doing. Being able to squeeze all the advantage from reward cards as part of your use of the hsa. And if you have access to an HSA at work, if you're in a HSA eligible health plan and you're not contributing the hsa, do you know it's the one thing that should be a higher priority than saving? And Your employer provided 401k past a match and it's a higher priority than my beloved Roth ira. It's true. So have an absolutely wonderful day and I look so forward to being with you on Wednesday.

Sally French (31:41)

Today's episode is sponsored by Smart Travel, a new podcast from Nerd Wallet. I'm Sally French. And I'm Megan Coyle. We're travel writers at Nerd Wallet and we love helping you make your travel budget work smarter. Because who doesn't love more trips for less money? People who hate fun, Megan, that's who. But that's definitely not you person who is listening to this right now. On Smart Travel, we don't just hand out travel advice, we break it down. Like, should you get that fancy airline credit card with the huge sign up bonus? Or is that just a shiny trap leading you to financial ruin? We have the answers. The answer is it depends. By the way, that's why we do the research for you. We crunch the numbers, dissect the fine print, and make sense of loyalty programs so you don't accidentally spend all your hard earned points on a sad airport hotel booked amidst a canceled flight. Each week we tackle real travel questions like is travel insurance worth it? How do you spot a good flight deal before it's gone? And can you actually use those random miles your aunt gave you for Christmas? Also, I want that aunt. Look, we don't just sit here and talk about travel. We live it. I once turned a canceled flight into a free trip to Denver. 200 in United vouchers and $45 in Starbucks gift cards. And you were so patient. Through it all, we've got practical tips, expert interviews, and plenty of hot takes. I call them hot takeoffs to help you travel smarter, not harder. So whether you're planning your next getaway or just love staying ahead of the travel game, follow Smart Travel on your favorite PODC app. Your passport will thank you and so will your wallet.