04.23.25 Clark Saves On Travel To Italy / Understanding BONDS

Summary

The Clark Howard Podcast: April 23, 2025 Episode: Clark Saves On Travel To Italy / Understanding BONDS

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Introduction In the April 23, 2025 episode of The Clark Howard Podcast, host Clark Howard delves into two primary topics: savvy money-saving strategies from his recent trip to Italy and a comprehensive breakdown of bonds—a subject often perceived as dull but crucial for personal finance. Throughout the episode, Clark provides actionable advice, shares personal anecdotes, and addresses listener questions to empower individuals in making informed financial decisions.

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Clark’s Italian Adventure: Money-Saving Tips for Travelers

Airfare and Hotel Savings Clark begins by addressing the current trends in the travel industry. Highlighting that the average airfare has decreased, he notes that while finding a "screaming deal" for specific dates and destinations can be challenging, overall costs have become more affordable. “The cost of travel has gone down recently” ([00:55]).

He emphasizes the importance of reshopping travel elements. For instance, Clark recounts how he saved over $200 by reshopping his car rental a day before his trip. Initially booked at $467 for a week, he managed to reduce the cost to €234 (~$260). This significant saving was achieved merely by revisiting and adjusting his reservation details.

Upgrading Rentals: A Case Study Clark shares an entertaining story about upgrading his rental car to an Audi A4 after his original booking was unavailable. Despite initial concerns about the size and parking challenges in Europe, he found the upgrade to be the "best rental car" he's ever had. “It was really, really special” ([06:02]). This anecdote underscores how flexibility can lead to unexpected perks without additional costs.

Booking Hotels Directly in Europe A crucial tip Clark offers is regarding hotel bookings in Europe. Unlike in large urban centers or chain hotels, many small, family-owned hotels often impose a 20-25% markup when booked through third-party sites like Priceline or Booking.com. Clark advises booking directly with these establishments to secure better rates, thereby avoiding unnecessary expenses.

Embracing Spontaneity in Travel Planning Clark advocates for a less rigid approach to travel planning. By allowing spontaneity, such as impromptu visits to nearby cities like Venice, travelers can enhance their experiences and potentially avoid high tourist taxes. He mentions, “Treviso, which is right nearby, is a much more exciting experience than going to Venice” ([10:30]).

Notable Quotes:

• “The only airline that said it wasn't worried was United, but everybody else in the airline industry freaking out.” ([02:15])
• “I always reshop the various elements of a trip. And the car rental I had booked was US$467 for a week, unlimited kilometers... we ended up paying €234 for the week.” ([04:00])

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Listener Questions on Travel Planning and Fraud Protection

Optimal Timing for Booking Flights Julien Kansas inquires about the best time to purchase airline tickets amidst economic uncertainties. Clark responds by explaining that with reduced international travel, airlines are likely to offer sales to fill seats. He advises, “Summer has basically two price seasons now, and going to Europe from mid-August on is generally a third cheaper…” ([12:19]).

Protecting Against Travel-Related Fraud An anonymous listener from Washington shares a distressing experience with a fraudulent United Airlines booking, where sensitive information was compromised. Clark emphasizes the pervasive nature of online scams: “You cannot ever trust any search engine to find the valid phone number to reach any company. Period.” He advises immediately rebooking through official channels to secure a new confirmation number, thereby preventing further unauthorized access ([14:56]).

Travel Insurance vs. Cruise Line Protection Plans Jeff from California seeks clarity on choosing between cruise line-provided travel insurance and policies from platforms like insuremytrip.com. Clark explains the fundamental differences:

• Cruise Line Protection Plan: Often offers credit toward future bookings based on the non-refundable portion of the trip.
• Trip Insurance Policy: Provides cash reimbursements for valid reasons without the obligation to rebook.

He highlights, “The coverages are not equivalent. It doesn't necessarily make one automatically better than the other. You just have to understand they work in very different ways.” ([17:03]).

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Understanding Bonds: A Comprehensive Guide

The Role of Bonds in Investment Portfolios Transitioning to a more serious financial topic, Clark demystifies bonds—a staple in diversified investment portfolios. He explains that bonds serve as a protective measure against the volatility of stocks. “Bonds are what are considered to be a protection by diversifying where your money is.” ([24:00]).

Impact of Interest Rates on Bond Values A common misconception addressed by Clark is the relationship between interest rates and bond values. Contrary to popular belief, when interest rates rise, the value of existing bonds decreases. He elaborates, “If interest rates rise, the value of your holdings of bonds... goes down.” This is because new bonds are issued at higher rates, making existing lower-yielding bonds less attractive.

Diversification and Bond Funds Clark advocates for investing in bond funds rather than individual bonds for most investors. Bond funds offer diversification across various types and issuers, mitigating risk. “Bonds are unloved, so ignored because they're not exciting, but the role they play is important.” ([29:00]).

Federal Bonds and Budget Deficits He raises concerns about federal bonds amidst rising budget deficits, suggesting that government-issued bonds may face challenges due to economic factors. Nonetheless, diversification within bond types remains essential.

Notable Quotes:

• “Bonds are like being the bank lending somebody money.” ([25:00])
• “Diversification is key to riding through unexpected times, bad times, or having the right mix during really good times.” ([29:00])

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Additional Listener Questions: Financial Planning and Debt Management

Financing IVF Treatments Tracy from Florida seeks advice on financing IVF treatments, which aren't covered by her insurance. Her consideration involves opening a new credit card to take advantage of 0% introductory APR offers. Clark cautions against consolidating credit through a single issuer to mitigate risk, advising diversification: “I'd rather you open a card from another issuer that offers…” ([32:00]).

Real Estate Investing and Depreciation Recapture Paul from Oregon inquires about the tax implications of depreciation when selling rental properties. Clark explains the concept of recapture tax, where the benefits of depreciation taken over the years are taxed upon sale. He notes, “At the time you sell the property, you have what's known as recapture tax.” Although beneficial in providing tax-free income during ownership, investors must prepare for potential tax liabilities in the future ([33:46]).

Paying Off Credit Card Debt Without Damaging Credit Rosario from North Carolina discusses strategies to eliminate $15,000 in high-interest credit card debt. Clark advises negotiating payment plans with lower interest rates while being mindful of how such arrangements are reported to credit bureaus. He suggests, “If they're giving you a payment plan with a lower interest rate… some will report it. And what does that reporting do?” Ultimately, he encourages proactive communication with lenders to secure favorable terms without jeopardizing credit standing ([36:32]).

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Conclusion In this episode, Clark Howard effectively balances travel-savvy advice with essential financial education on bonds and debt management. By sharing personal experiences, addressing listener concerns, and simplifying complex financial concepts, Clark reinforces his mission to empower individuals to save more, spend less, and achieve financial freedom.

Upcoming Segment Tease: Clark hints at future content, including a "Clark Stinks" edition, promising more engaging and informative discussions. He concludes by reiterating the podcast’s commitment to providing valuable knowledge for listeners to enhance their financial well-being.

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Notable Quotes Recap:

• “The cost of travel has gone down recently.” ([00:55])
• “The best rental car I've ever had.” ([06:03])
• “Diversification is key to riding through unexpected times.” ([29:00])
• “You cannot ever trust any search engine to find the valid phone number to reach any company.” ([14:56])

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Final Thoughts Whether you're planning an international trip or navigating the complexities of investment portfolios, this episode of The Clark Howard Podcast offers practical insights and strategies to optimize your financial decisions. Tune in to equip yourself with the knowledge needed to manage your finances effectively and confidently.

Transcript

[Progressive Insurance]

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[Clark Howard]

It'S great to have you here on the Clark Howard Show. Our maybe I should say Bonjourno or Sara. I'll explain why soon, 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 if you've got a question for me or for our Ask Our Advisor show, please go to clark.comaskpost away. Today I want to talk about my recent trip to Italy and some money saving tips for you on the travel and later, on a much more serious note, I want to talk about bonds. Now. Bonds, normally a snooze fest, right? I mean, who wants to talk about bonds? Except a lot of people are asking what's the role of bonds in my life? Where do they fit? I'm going to answer that for you. So yesterday and Wes's Ask An Advisor podcast, he was talking about consumer confidence being low and all that and how that was going to affect travel. So the good news is that chart after chart I see shows that the cost of travel has gone down recently. The average airfare down doesn't mean when you go look for a ticket to a specific place at a specific time that it's going to be a screaming deal. But overall, the airlines are worried. The only airline that said it wasn't worried was United, but everybody else in the airline industry freaking out. Hotel bookings have softened and the rates as a result have been coming down. And it's not a collapse, but it's a trend. That's your friend. And it takes a while for airlines to say, oops, we're going to park Planes in the desert and wait this out a little bit. And hotels, you just don't go park a hotel room in the desert. You sell it for what you can get for it. So if you bought airline tickets over the last many months or you booked a hotel over the last many months, re shop those. And you've heard me many times talk about my thing about travel is I buy the deal and then figure out why I want to go there. But there was a sale airfare sale to Italy. And my wife is 7% Italian, but gets to Italy and she's calls it her homeland. She feels at home there. So anytime there's a sale to Italy, I'll say, honey, you want to go? She says, yeah, when? And we book it. And so we did. And that's how we ended up in Italy. But I want to share one of the things that is straight out of my playbook that should be in yours. So I always reshop the various elements of a trip. And the car rental I had booked was US$467 for a week, unlimited kilometers. And I'd been watching it and then I reshopped it the day before we went. Usually I talk about the week before going, what did we end up paying? €234 for the week. At the time that was like €260 something for the week. So just taking three minutes and reshopping the car, the price dropped a couple hundred dollars, a little bit more than $200. I mean man, that was awesome. And from a video we posted on social, I guess on YouTube as well, there were a number of comments. What was I doing splurging on an Audi? I hadn't. I'd booked a cheap rental and when I got to the car rental, they were out of what I booked. The guy said, well I got this, you can have instead, or that. And I'm like, man, never driven an Audi. Let's try that. It was big, which was hard parking it because it was so big. Audi A4, which in Europe is like driving a monstrous SUV because the parking spaces are the size of where you'd park a bicycle in Europe. But anyway, the Audi was so much fun to drive. Best rental car I've ever had. Never even thought about an Audi, but it was really, really special. So that's why I was in an Audi, because people saw in the video when my wife Lane was shooting me in the car, they saw the Audi. They're rings, right?

[Co-host]

Yeah, they're rings.

[Clark Howard]

Rings.

[Co-host]

You are forgiven. It's so funny. That's what people judge you for. That car's too expensive.

[Clark Howard]

But it wasn't, it was like the double deal. The price had dropped a couple hundred bucks. Changing car rental companies. And then I got the upgrade only because they were out of what I had. Which was funny because you know, I rent cars like 30 times a year.

[Co-host]

I was going to say, like I wonder how many thousands of cars you've rented. And I've never heard you say something like this was the best rental car I've ever got.

[Clark Howard]

Which is funny because I had the second worst rental car I'd ever had my life two weeks before.

[Co-host]

Ah, payback.

[Clark Howard]

And I rented a compact car and what I got was something that was about like a Mr. Magoo mobile.

[Co-host]

So yeah, like the car that you rented at your wedding for the getaway car, the little purple.

[Clark Howard]

That was a much, that was a much better vehicle. And it was $16 a day. Thank you. Unlimited mileage.

[Co-host]

Your mother in law is still, still.

[Clark Howard]

Mad at me about that. Oh well, but I, I only talked about the car and the fact that the, you reshop that and you're not always going to save money but about 90% of the time. But I got something for you about Europe that's important to know about hotels. So you know how I like to book hotels using discount sites like Priceline and Booking and various sources to find deals on hotels. But in Europe where a lot of the hotels are small family owned, you're paying a markup when you book on third party sites instead of getting a lower price. And you'll see this not in a big urban center hotel or a chain hotel. You're still going to save money using third party hotel sites. Make sure it's a one that's well known and not some UFO hotel site. But when you're staying at a small place, if you can book direct with them almost always the rate will be about 20, 25% lower direct with the family owned little place than it will be booking through any of the hotel sites or hotel apps. Just something important for you to know. And when we go on a trip like that, we plan nothing. We landed in Milan, had our rental car and then just went wherever. And the randomness of that means you're having a great time somewhere. You stay longer, you, you have an just a blah time somewhere, you move on. And my brother in law was really pushing us to go to Padua. I don't think that's right way to pronounce it in Italian, but he loved it. We didn't like it at all. So we got in the car and we went somewhere else. We went to Treviso, which we loved. And so that's the randomness if you don't over plan a trip, that you just let the spirit move you wherever you go. Funniest thing we did though, after we left Treviso, it was close to dinner time and we were 20 minutes from Venice. So we were like, huh, we haven't been to Venice in a good while. We drove over, parked the car, took the train from Mestria into Venice, which was €3 round trip, and wandered around and ate dinner and came back and left. How random is that? Yeah, we decided to go to Venice for dinner. But now, you know, the tourist tax is back in effect because it went into effect a couple days ago for the season. And if you're not familiar with it, Venice is being so over touristed that to try to get people not to go there, they charge this tax. It's pretty pricey on the weekend per person and if you don't buy it, you try to slip through without buying it. I think it's a €300 fine a person when you can't present that you paid the tourist tax. But for my money, Treviso, which is right nearby, obviously no Americans ever go there, is a much more exciting experience than going to Venice. Just my opinion.

[Co-host]

All right, quick question. I know this is going long. What's the best meal you have when you were there?

[Clark Howard]

Oh, there are no bad meals, right? In Italia.

[Co-host]

Was there anything exceptional?

[Clark Howard]

Oh yeah. Okay, so I had the best pasta of my entire life. And you know, I'm a pasta hollow. It was the best I've ever had. And it was not expensive.

[Co-host]

Was it just noodles or was it.

[Clark Howard]

It was noodles with the sauce made from three different tomato actually made from the tomatoes. Like, you know, it's not going to be out of a can. Yeah, it was unreal. And then again and again and again, we'd have pizza and be like, wow, this is the best pizza of the trip. Then you have the next one, you say, no, this is the best pizza of the trip. And it was so crazy cheap eating there. And you'd go to a restaurant and a margarita pizza that the two of us could share would be seven euro, eight Euro. I think the most we paid was eight and a half euro. You just figure now because of the tariffs, the value of the euro has gone up a lot versus the dollar. So being like eight and a half dollars to $10 or so and change.

[Co-host]

Oh, you're making me dream of traveling. All right, here's, here's some questions.

[Clark Howard]

Don't dream about travel. Yes, you can afford it if you can do it.

[Co-host]

Yes. Julien Kansas wrote in speaking of travel, saying, I'm planning a big trip to Spain this summer. It fits in the vacation schedules. I think she's saying that's why she's going in the expensive season. I'm tracking airline ticket prices on Google Flights and Hopper. I've already booked my hotels with refundable reservations and will reshop that closer to the trip. With the current economic situation, will airline tickets be affected and when is the best time to buy so, Julie, I've.

[Clark Howard]

Been watching this closely because media reports are clear that foreigners are not coming to the US in normal numbers this summer, which means the airlines that fly across the Atlantic and fly across the Pacific are going to have to fill those seats with Americans that are interested in going overseas, rather than people overseas being interested in coming to America. So fares are not I've not seen any meaningful drops yet, but eventually airlines are going to be huh? Our computer models aren't working. We're going to have to have some sales and there will be sales. So you've already picked hotels that are refundable, which means you've already got tentative dates. You're going in Europe, but I don't know if this will work for you. Summer has basically two price seasons now, and going to Europe from mid August on is generally a third cheaper to half the cost of going in June, July and the first half of August. So if you can do your trip at the back end of summer, everything should be cheaper for you.

[Co-host]

Anonymous in Washington says. I'm a longtime listener and my wife and I are retired law enforcement. We're very familiar with fraud. We normally make all travel arrangements through secure apps. This time I foolishly obtained a fraudulent number for United through the web. My bad. You have warned us. I called to make a reservation with a flight credit. I realized the person was a fraudster and ended the call, but not before they obtained our names and confirmation number. I checked on united.com and discovered that with just the confirmation number and last name not logged into one's United account, the fraudster can access the full itinerary. Cancel or change the flight, change the seating, see our full TSA numbers, change our phone number and email address, and see the last three numbers of our United accounts. I called United to have them change the confirmation number and I was told this was not possible. The most they could do was to make A note that any changes to the reservation had to be made by phone and the person would need to provide a password. After setting this up, I discovered that information was still available online with links to make changes. Clark, is there any pressure we can put on United to change this unsecure access? Shame on me for not using my normal methods of number verification. This is a good reminder that even seasoned investigators can open themselves up to scams when working too fast and not remaining diligent.

[Clark Howard]

So anonymous, thank you for putting your life on the line in law enforcement and your wife. Yep, yep, that's number one. Number two, stop beating yourself up. Everything is set up to conspire against us, especially any Google search. The results you'll see when you're looking for any company customer service number of any type, not just travel. Overwhelmingly, result after result after result after result are con artists. They're scamsters. You cannot ever trust any search engine to find the valid phone number to reach any company. Period. No exceptions. Having said that, you should see what the fare is now. If the fare is the equivalent, the same as what you have now, what you do is almost all fairs are now cancelable without fees or changeable without fees. If you cancel the reservation and immediately rebook using the value of your current reservation, it will generate a new confirmation number that the crooks will not have. Airlines have looked at this as a cost of doing business. Knowing that there's no real security surrounding people's reservations is true at every airline that all you need is last name confirmation number. Some airlines also require the date of travel. And so that's why before you go, especially if you book through any third party site, you want to check at the airline's own site that your reservation is still there, as it should be.

[Co-host]

And then probably what these people were trying to do, they would have gotten a credit card number and charged extra for the change. So hopefully they wouldn't do anything with this in the end.

[Clark Howard]

But yeah, yeah, they realize they're moving on to the next person who they con through a Google search, right?

[Co-host]

Jeff in California says, Dear Clark, I've been reading the information on your website about travel insurance and I'm confused. We're planning on a cruise next April 2026 from Miami to Barcelona with multiple stops in between. You state that one should not buy travel insurance from the cruise line due to its costing more. If I go to insuremytrip.com and include the cost of my cruise about $8,000 and select cancel for any reason, what's offered to me is a lot more expensive. The cheapest policy being around $650. The cruise lines policy is about 500 and includes a cancel for any reason provision. And then they put the language in there. It sounds like I'd get a 75% reimbursement. But what is the penalty amount they refer to? I don't see that wording in other policies. And it does look like the medical and evacuation coverages are lower. At this point, I'm not sure where to go.

[Clark Howard]

Okay, so I chuckled when you said that you read what we have about travel insurance and you're confused because travel insurance is such a difficult product to buy because the, the promises that come with the policies are seldom how it actually plays out in real life. What the cruise line is offering you is a trip protection plan, not insurance. Right now we're not in a position where with the three major cruise lines there's any worry that they could go and solve it. But the biggest problem with buying coverage from a travel supplier, a tour operator, a minor cruise line, whatever, is that if they go bust, you don't have actual insurance. There's no supplier default provision in the coverage. Now let's go to your question. So when you book a cruise with most cruise lines, there are periods of time that the cruise is 25% non refundable, 50% non refundable, 75% non refundable, 100% non refundable. The cruise protection plan, different than a trip cancellation insurance policy is only giving you the credit money based on how much of the cruise at that point was non refundable. So they give you 75% of that value towards a new booking. That's all you get is a new booking credit. What's called in the industry in FCC future cruise credit. When you buy a trip insurance policy, if you use the provisions of it, you get your money back if it's for a valid reason or if you bought cancel for any reason coverage you get that percent back is cash in your pocket. It does not require that you instead book another cruise. So the coverages are not equivalent. It doesn't necessarily make one automatically better than the other. You just have to understand they work in very different ways. I hate that everything involving cruises that we ever seem to hear about is when somebody has a problem and they've tried to use trip protection plan coverage or cruising, you know, a real trip insurance policy and they're stumbling their way through it because they are complicated and difficult and never as easy to use as they make it sound. Coming up ahead. Talk about something that if you have insomnia, you will really sleep better. Listen to a long briefing on bonds. I promise the explanation I give of Bonds ahead will be simple and hopefully not exceedingly boring, but it's stuff you need to know right now. In volatile economic times, the only thing.

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[Clark Howard]

Ready to start talking to your kids about financial literacy? Meet Greenlight, the debit card and money app that teaches kids and teens how to earn, save, save, spend wisely and invest with your guardrails in place. With Greenlight you can send money to kids quickly, set up chores automate allowance and keep an eye on your kids spending with real time notifications. Join millions of parents and kids building healthy financial habits together on Greenlight. Get started risk [e-mail] Spotify Standard Portfolio that an investment advisor will talk about. Any literature you read, we'll talk about is having a diversified portfolio and appropriate to your age. That means you have a certain amount of your money in stocks, generally not individual. But the base of what you do will be index funds where you own little tiny bits of hundreds or thousands of companies here in the United States. And what most Americans don't want to hear is also overseas. And then you have bonds. What's a bond? A bond is where you're kind of like the bank lending somebody money. And it could be a government bond, federal, it could be a state bond, which would generally be a tax free municipal bond, or it could be a corporate bond where you're lending money to big corporations. So bonds are what are considered to be a protection by diversifying where your money is. Because historically, when stocks are going up, bonds just kind of sit there, may go down some. When stocks are taking a fall, bonds are usually doing the opposite, rising. And remember I said usually because we've had circumstances in the recent past where both stocks and bonds fell at the same time. Because one of the things that you look on any survey of investor knowledge or survey of people's knowledge of investing, and there's a question that's always there. If interest rates rise, does the value of your bond go up or down? People overwhelmingly say, well, if interest rates are going up, the value my bond must be going up. Nope, it's the opposite. And this is an important thing for you to know. If you're right now freaked out about stocks and you're like, well, I heard about buying these bond things, maybe I need to do that. So when interest rates rise, the value of your holdings of bonds, which most of us would own in a bond fund, the value of that bond fund goes down. And the reason is that if I'm going to invest in bonds, I'm going to want to earn what the Market rate is paying in interest. Well, if I was in a bond fund and bond rates were like 4% and then they rise to 5%, the value of mine goes down because I've got to give any future buyer what the market is paying in interest rates. So the value of my bond might go down 20% or my bond fund. If that just made your eyes glaze over, go to Investopedia and read the explanation there. You might really have a good sense of how it works. But bonds are an important part of an investment portfolio. With the percent of bonds you have as part of your overall mix rising the closer you get to retirement and most of the time, with the last few years having been an exception, that will provide you some protection by diversifying how your money is invested. Just like if you own a rental property. That's a diversification away from owning stocks or bonds. Diversification is key to riding through unexpected times, bad times, or having the right mix during really good times, because you don't bet the whole farm on one thing. That's why your investing always starts with a base, what Charles Schwab long ago called the core of widely diversified having funds, my preference, exchange traded funds or index funds. Having the mix of bonds appropriate for your age so that you are balancing out risk and you're spreading out your money. Because it's so hard with individual stocks to know what's going to be the hot stock for you to own and what you think is going to be hot later turns out to be not. There are companies I could mention to older listeners and viewers that you'll remember were considered to be can't lose kind of things. Xerox and Kodak, two examples. I could mention any of a number of computer companies that were powerful as could be that are now extinct. Diversification is so important so that you, yes, you do benefit from companies doing really well because it's part of your overall holding of index funds. But bonds are so unloved, so ignored because they're not exciting. Being a lender is not really as exciting as being an investor, but the role they play is important. But bonds that are based on federal debt are a big question mark right now because of our federal budget deficit. So bonds, even if bonds, generally the interest rates on them are going, let's say, down at some point in the future. Federal Treasuries may actually have rising interest rates because of an unhealthy level of budget deficit we're running and deficits that we have to cover the debt payments we have to cover on Federal. So that's why also with bonds, diversification is key where you own various types of bonds appropriate for your age and situation. And that's also why I like funds rather than owning individual bonds. There are situations where sophisticated investors would buy individual bonds, but for most of us, doing that is too high risk. So the bond market is its own thing that most Americans really don't relate to, but it needs to be part of the overall thing that you do. At least you could own a bond index fund that would do the same kind of thing as a stock index fund or a stock etf where you have spread your money out widely in the bond market. And that is the most general thing to give you as a basic on bonds and why they are an important part of what you do. All right, in our Ask an Investor podcast Advisor asking about Ask an Advisor. What did I say?

[Co-host]

Ask an investor.

[Clark Howard]

Ask an advisor.

[Co-host]

I mean, Wes is an investor and an advisor, so.

[Clark Howard]

But our podcast Ask an Advisor can drill down to far more specific questions you have about particulars of investing in stocks or bonds or your portfolio or how you do proper financial planning. But as a general rule, I just want you to understand bonds are an important part of the game.

[Co-host]

All right, we have some questions. This one's from Tracy in Florida. Tracy says, my husband and I are about to do ivf. Unfortunately, it's not covered by either of our insurance.

[Clark Howard]

That is unfortunate.

[Co-host]

It is, yes, very expensive. While we have the money to pay for it up front, we would like the flexibility of monthly payments. We both have excellent credit, have only the debt of a house mortgage, and we pay off our credit cards each month while maxing out our yearly contributions to our 401s and and Roth IRA accounts.

[Clark Howard]

That is very impressive. Wow.

[Co-host]

Would it be a good idea to open a new credit card? We are considering the Chase Freedom Flex. We already have the Freedom Unlimited and Sapphire Preferred. The advertises 0% intro APR for 15 months from the account opening on purchases. We will be able to pay it off in full within the 15 months.

[Clark Howard]

So interesting question. What I don't like is you having all your eggs in the Chase credit card basket. I'd rather you open a card from another issuer that offers, you know, one year, same as cash, 18 months, whatever. That gives you the 0% APR for that period of time rather than having yet another card from the same issuer. Because if Chase ever gets itchy fingers and is not happy with how much exposure they have to the two of you, that would be a bad news day when they without notice cut your credit limit or say we don't want you anymore, anything like that. So I'd rather see you diversify. And we updated our guide to the best 0% plans available on credit cards on the 10th of April. So it's a pretty current list that we've got on clark.com for you to look at in order for you to find the best other than Chase to have that interest free period. And I hope that the IVF procedure works just like you're planning for sure.

[Co-host]

Paul in Oregon says Clark, I've read your book on real estate investing and you signed it. My question is how does the depreciation part work as far as taxes when you sell rental property, is the depreciation paid back from the sale price at that time?

[Clark Howard]

Yeah. So Paul, this is the, the bad part for a real estate investor following the really great part, which is year after year you have the ability to report essentially no income even as you're receiving income on an investment property. So at the time you sell it, you have what's known as recapture tax. So a lot of the benefit you got comes back to bite you in part at the time you sell the property. But the odds are you've had a big gain on the property over the years. You've benefited so much from having the tenants paying you money all through those years. And so the tax benefits you got in current years, each year you had it occupied by a tenant that has to be paid back at some point, but it's still a preferential tax rate that you pay. I'm. I hate to quote an exact tax rate, but I'll take a stab anyway, I think it's 26% is the recapture rate. CPAs who do tax are dying right now because yeah, it was that and whatever year. But anyway, the idea is that there is a recapture from the benefit you received all those years.

[Co-host]

CPAs who do tax are probably on a beach somewhere right now.

[Clark Howard]

Let's hope they are after tax filing deadline brutality. By the way, the real estate book was from 20 years ago.

[Co-host]

Yes, that's an older one.

[Clark Howard]

Gosh, I should look at it and see how much of what I predicted then in the Wayback Machine back when I we have a Clark Smart real estate. What's still valid today or how foolish I look in a lot of ways that would be fun to point out, make fun of myself and point out all the things that said in that real estate book long ago that are absolutely make me look dumber than a box.

[Co-host]

I bet it holds pretty true.

[Clark Howard]

I don't know.

[Co-host]

You know what would be really fun for you to write another book.

[Clark Howard]

10 and done 10. 10 was a great number. Made it to double digits.

[Co-host]

With books, it goes to 11. You know what movie that's from? Spinal Tap.

[Clark Howard]

Don't know what that is.

[Co-host]

Rosario in North Carolina says, I'm trying to pay my way out of credit card debt. Is it possible to negotiate my balance with the lender without it hurting my credit? As of now, I'm paying my payments plus and I'm trying to make headway, but sometimes it feels as if there is no way out. For reference, I have about $15,000 in high interest credit card debt and I hope to have it completely paid off by the end of this year.

[Clark Howard]

Okay, so first of all, Rosario, the greatest thing you said to me was that you feel like you can have this paid off by the end of 25. And that is wonderful. So if you cut a deal with the credit card company, you need to know how they're going to report that deal. Some don't say anything. If they're giving you a payment plan with a lower interest rate for a period of time to help you get the debt paid off, some will report it. And what does that reporting do? It is something that would then be seen by other potential lenders and they'd say, oh boy, oh boy, this person's in trouble here. Maybe we need to re evaluate the credit we've already given her or other applications for credit would likely not go through while you're paying off this debt. It's a great thing though to pay it off. So you, you talk to the credit card company and you say, my goal is to pay this off over the next many months. Can we make some kind of deal on a payment plan with a lower interest rate? And credit card companies don't like to talk about this, but generally they do this because they're worried about having bad debt write offs. And so in lieu of that, many, most can't say all will do a private negotiated payment plan with you or concessions with you. But the key question is how do they report this to the bureaus before you proceed with entering into any kind of plan with a credit card company and I think that's fantastic that you're making headway and that you are in a position to be able to wipe out that debt this year. What a great holiday gift, Christmas gift to yourself if you're able to make that happen. I want to thank you so much for joining us on today's podcast. And you know what's coming up Friday? Clark Stinks. And apparently from so many of the posts coming in, I am really smelling it up bad right now. So don't miss Friday's Clark Stinks edition, our podcast. Know what? We're all about you being empowered with knowledge that helps you save more, spend less, and avoid getting ripped off.