04.25.25 Clark Answers His Critics on Clark Stinks / Fidelity Warning

Summary

The Clark Howard Podcast: Episode Summary (April 25, 2025)

Title: Clark Answers His Critics on Clark Stinks / Fidelity Warning
Host: Clark Howard
Release Date: April 25, 2025

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Introduction and Overview

In this episode of The Clark Howard Podcast, host Clark Howard delves into his ongoing "Clark Stinks" segment, where he addresses criticisms and feedback from listeners regarding his financial advice. The episode also features a critical warning about Fidelity Investments, one of Howard's favored financial institutions. Throughout the episode, listeners contribute their insights, experiences, and critiques on various financial topics, enhancing the depth and engagement of the discussion.

1. Clark Stinks Segment

Clark opens the episode in a playful yet self-deprecating manner, joking about his own personal hygiene before transitioning into the "Clark Stinks" segment, where he addresses listener criticisms.

Clark Howard [00:52]: "I got to hear why I really stink it up in this week's Clark Stink segment."

2. Oil Change Advice Criticism

A listener named Alex criticizes Howard’s advice on oil changes, arguing that frequent oil changes may not be necessary with high-quality synthetic oil and filters. Alex emphasizes that using full synthetic oil and quality filters can extend oil change intervals, potentially saving money.

Alex [02:30]: "People pay up to $150 for oil changes now. So buying your own filter and having them use full synthetic oil would be worth it if you only had to change it once a year..."

Clark acknowledges the validity of Alex’s points but highlights the importance of using the right oil and filters for low-mileage vehicles to avoid sludge and other issues.

Clark Howard [04:51]: "Using the right oil and a quality oil filter, how would you and I as a consumer know what a quality oil filter is? But those two things in combination, absolutely valid and valuable."

3. Walmart Plus Benefits

Listener Paul points out that Howard overlooked significant benefits of Walmart Plus, such as the free road hazard warranty and free tire repairs, enhancing the value proposition for members.

Paul [05:36]: "If you're a Walmart plus member, that road hazard warranty is included for free... Another additional perk of Walmart plus membership we just tried on our last trip and they gave zero hassle."

Clark responds by highlighting the versatility of Walmart Plus, including free and grocery delivery, and notes that certain American Express cards offer Walmart Plus membership for free.

Clark Howard [06:13]: "Walmart plus gives you free delivery and really great grocery delivery plans as well as part of the Walmart plus umbrella in addition to the other things it has."

4. 23andMe Data Concerns

Erin Aaron raises concerns about data privacy with 23andMe, specifically regarding the storage of saliva samples for future research. She explains the steps taken to secure her data.

Erin Aaron [07:05]: "If someone chose to have 23andMe hold their saliva sample for possible future research, that setting needs to be changed..."

Clark underscores the importance of data privacy, especially in light of 23andMe's bankruptcy, expressing skepticism about the protection of medical privacy.

Clark Howard [07:36]: "There's not anything that I've seen anywhere that makes me feel that the bankruptcy court is going to respect anybody's medical privacy in this 23andMe bankruptcy."

5. Automobile Tariffs History

Alan critiques Howard’s remarks on auto tariffs, providing historical context about the longstanding 25% tariff on light trucks (the "Chicken Tax") since 1964, which has protected domestic light truck manufacturing in the U.S.

Alan [08:23]: "The United States had 25% tariffs on light trucks since 1964. The chicken tax... it's important to emphasize that they have never stopped being used..."

Clark acknowledges the oversight and discusses the impact of such tariffs on creating a protected market for pickup trucks in the U.S., expressing his preference for free-market dynamics.

Clark Howard [09:03]: "I didn't know it was 64. I thought it was later, but it made an artificial market by making us an island market for pickup trucks in the United States."

6. Online Banking Issues with Raisin.com

Heidi reports difficulties with withdrawing funds from a high-yield savings account linked to Raisin.com, noting delays and loss of interest during the transfer process compared to other banks like Everbank and Fidelity.

Heidi [09:53]: "It’s very difficult to get your money out since they created a cash account system where you first have to transfer your funds there which takes a few days..."

Clark agrees with Heidi’s frustrations and acknowledges the need to update reviews of Raisin.com based on her experience.

Clark Howard [10:28]: "I think we need to note that in our review of Raisin."

7. ETA Scam Prevention

A listener from the Granite State shares how Howard’s warnings about ETA (Electronic Travel Authorization) scams helped her avoid fraudulent websites posing as official government sites.

Listener [10:54]: "I recalled Clark's warning about scammers out there in the ETA world... I'm very thankful that I caught Clark's podcast when he issued his warning..."

Clark reiterates the dangers of fake government websites and urges listeners to stay vigilant to prevent falling victim to such scams.

Clark Howard [11:31]: "There are all these fakes out there that get you that con... you think you're at the real government site and you're not."

8. Ireland's Train and Transportation Systems

Jimmy criticizes Howard for misrepresenting Ireland’s transportation infrastructure, particularly praising its advanced train systems between major cities. He also shares insights on car rentals and insurance challenges in Ireland.

Jimmy [12:51]: "It is not a backward country when it comes to train transportation... renting a car there is catastrophic..."

Clark expresses surprise and appreciation for the correction, admitting his lack of awareness about Ireland’s robust train network despite his frequent visits.

Clark Howard [13:06]: "I was not aware of any meaningful train network in Ireland. So I really appreciate being set straight..."

9. Bitcoin Criticism

Jim from New Mexico vehemently opposes Howard’s negative stance on Bitcoin, arguing for its legitimacy as a mainstream investment and suggesting inclusion in retirement portfolios.

Jim [14:24]: "Bitcoin's not perfect, but your opinions on it smell so bad, I'm tempted to Febreze my car speakers every time you bring it up."

Clark responds by clarifying his cautious approach towards Bitcoin and cryptocurrencies, emphasizing their speculative nature and current vulnerabilities.

Clark Howard [15:00]: "They're still in the infancy of crypto. So it is still a Wild west kind of thing... I urge caution always involved with crypto."

10. Fidelity Investments' Annuity Practices

The core of the episode addresses concerns about Fidelity Investments' practices in selling annuities. Howard criticizes the dual role Fidelity plays—acting as both a fiduciary and a commission-based salesperson—leading to conflicts of interest and pushing high-commission, high-expense annuity products.

Clark Howard [19:45]: "Annuities are regulated by states, not the federal government... it should not be that hard for a consumer to understand."

Listeners express disappointment with Fidelity, comparing its practices unfavorably to other companies like Southwest Airlines. Howard calls out the insurance industry's lobbying efforts to avoid fiduciary standards, which would prioritize customers' best interests over sales commissions.

Clark Howard [24:08]: "Fidelity is still one of my favorite children. Southwest is no longer one of my favorite children."

An anonymous caller from Iowa provides a nuanced view, acknowledging that while some annuities have good features, the majority are problematic due to high commissions and restrictive surrender schedules.

Anonymous Listener [25:15]: "Annuities can be a powerful tool for a portion of your retirement funds... But if someone offers one to you and you're not a financial expert, it's best to run away."

Clark concludes by highlighting the insurance industry's resistance to adopting fiduciary standards, pointing out that the real issue lies with unscrupulous salespeople rather than annuities themselves.

Clark Howard [26:59]: "The insurance industry is terrified of being required to do the right thing legally. That's the real problem."

11. College Funding for Daughter Studying in Canada

Drew from New York seeks advice on funding his daughter's Master's program at McGill University, focusing on managing currency exchange rates, establishing Canadian bank accounts, credit card options, and car insurance.

Clark offers comprehensive guidance, recommending tools like Revolut or Wise for favorable exchange rates, suggesting no foreign transaction fee credit cards, and advising consultation with McGill’s foreign student resources for car insurance.

Clark Howard [28:36]: "You can establish your daughter when she gets to Canada... with Revolut or Wise, it allows you to."

12. Tax Payment Fees via Debit Card

Patrick from North Carolina raises a concern about being charged a $25 service fee when paying federal taxes via debit card through TurboTax. He seeks clarification on why this fee was imposed.

Clark explains that the fee is not from TurboTax but from the third-party payment processors used when paying taxes with a debit or credit card. He regrets not addressing this issue earlier and advises linking a checking account (ACH) for tax payments to avoid such fees.

Clark Howard [32:22]: "If you'd paid with a link to your checking account, there would have been no fee at all for paying your taxes."

Conclusion and Final Remarks

Clark wraps up the episode by thanking listeners for their engagement and emphasizing the importance of empowerment through knowledge. He encourages subscriptions to his free newsletters and previews upcoming content.

Clark Howard [32:56]: "I hope that you have learned things today. I certainly have, as I do every time."

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Notable Quotes:

• On Oil Changes:
  Alex [02:30]: "People pay up to $150 for oil changes now... if you only had to change it once a year and would have no trouble driving 25,000 miles..."

• On Walmart Plus:
  Paul [05:36]: "If you're a Walmart plus member, that road hazard warranty is included for free..."

• On Bitcoin:
  Jim [14:24]: "Bitcoin's not perfect, but your opinions on it smell so bad..."

• On Fidelity Annuities:
  Anonymous Listener [25:15]: "Annuities can be a powerful tool for a portion of your retirement funds..."

• On Tax Payments:
  Clark Howard [32:22]: "If you'd paid with a link to your checking account, there would have been no fee at all for paying your taxes."

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This episode of The Clark Howard Podcast offers a rich and engaging exploration of listener feedback, critical financial advice, and insightful discussions on consumer rights and financial products. Clark Howard effectively addresses both praise and criticism, providing clarity and actionable advice for his audience.

Transcript

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[Clark Howard]

It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. And you have to know I'm in an outstanding mood today. Why? Because I stink. That's right. My $50 tree deodorant did not do its job, I guess. $50 tree? How could they do that to me? Anyway, I got to hear why I really stink it up in this week's Clark Stink segment. And later, I got to give you a warning about one of my favorite children, Fidelity. I'm going to tell you why later. Special warning for you. Keep your ears open if you are a Fidelity Investments customer. But right now, it's time to hear why I'm stinking it up. I should have never encouraged you to speak. You almost think I'm pretty stupid. You should be ashamed of yourself. Well, maybe I'm wrong. Maybe I'm wrong. Maybe you're right, pal.

[Caller/Listener]

Okay. Your advice on oil changes smelled like burnt transmission fluid.

[Clark Howard]

Okay, wait, wait, wait, wait. How many posts have you had on Clark Stinks about when I was asked the question about oil changes?

[Caller/Listener]

Several.

[Clark Howard]

We passed a couple of dozen now.

[Caller/Listener]

No, no, no, no.

[Clark Howard]

Okay, but we've had them. We've had.

[Caller/Listener]

We've had a few.

[Clark Howard]

Yeah.

[Caller/Listener]

Regarding changing oil every 5,000 miles, I've researched this topic thoroughly and once changed my oil every 1500 miles. Oil never goes bad. It is the additives that wear out. And obviously the oil gets dirty eventually. There are two things that affect oil, time and mileage. There are countless videos that dive into oil filter quality that people should watch for before taking any advice. We have a Civic that is driven less than 10,000 miles per year. I buy quality Oil filters and full synthetic oil that is rated for one year or 25,000 miles. I change the oil once per year. We've had the car 10 years. And when I change the oil, there is no sludge, bad smell or anything unusual about it. If I were to use regular oil and a cheap filter, I could not do this safely and 5,000 miles would be recommended. People pay up to $150 for oil changes now. So buying your own filter and having them use full synthetic oil would be worth it if you only had to change it once a year and would have no trouble driving 25,000 miles as long as it's within one year. Everyone giving the 5,000 mile advice has something to gain from you following that schedule. Alex.

[Clark Howard]

Alex, thank you. So the 5,000 mile advice was actually from a prior Clark Stinks post where someone who had said Clark sinks. I had said follow the manufacturer's recommended guide and that set off a lot of very angry comments. But using the right oil and a quality oil filter, how would you and I as a consumer know what a quality oil filter is? But those two things in combination, absolutely valid and valuable. And if you have a low use vehicle, just as the post from Alex said, it's very important that you not say, oh, I don't need to change the oil. I haven't driven the car, you know, 2,000 miles in the last three years. If you haven't done proper maintenance, you're still putting yourself at risk even as a very low mileage driver. Okay, so that's going to cause a lot more posts, right?

[Caller/Listener]

I don't know. We'll see. Have you ever changed your own oil?

[Clark Howard]

Yes.

[Caller/Listener]

Nice.

[Clark Howard]

Yeah. So I, back in 1978, I took a nine month auto mechanics course and it was to learn how to do major maintenance and repairs on vehicles. And by the end, about the only thing I was capable of doing was changing my own oil and changing out my windshield wiper blades. That was about it. And, and other people in the nine month program were doing all these crazy things, engine overhauls and all this stuff. And I just sit there and watch. I was like, you learned all that while I was staring out the window?

[Caller/Listener]

All right. Speaking of cars, you failed to mention in your Cheap tires website article that if you're a Walmart plus member, that road hazard warranty is include for free. You do not have to pay $10 a month. This is not available in New York. I'm shocked that you missed a savings of $40 like that. Additionally, if you get a nail or flat tire. You can go to a Walmart that has the tire center and they'll repair your tire for free even if you did not purchase your tires from Walmart. Another additional perk of Walmart plus membership we just tried on our last trip and they gave zero hassle. Love your show and have listened to you forever. Thanks Paul.

[Clark Howard]

Paul, thank you very much. You know we talk Amazon, Amazon, Amazon. We almost never talk about Walmart plus, which I've been in from the very beginning of Walmart Plus. And Walmart plus is so versatile, offers so many different things. And you just pointed out one more if you have not considered Walmart plus, do you know one of the big benefits from Walmart plus has been for many families, a lot of people don't like shopping in a physical Walmart. Walmart plus gives you free delivery and really great grocery delivery plans as well as part of the Walmart plus umbrella in addition to the other things it has. And if you have certain American Express cards, you get Walmart plus for free, right?

[Caller/Listener]

They rebid it back to you. Clark, you're wonderful, but you missed a detail with the 23andMe data concern. If someone chose to have 23andMe hold their saliva sample for possible future research, that setting needs to be changed for 23andMe to 23andMe to dispose of the sample. It was a simple box I had to uncheck in my account. I downloaded my results, told them to delete my info, confirmed that choice in the email that they immediately sent and then I unselected the storage of my saliva sample. It only took a few minutes.

[Clark Howard]

Erin Aaron okay, say Aaron, this is exactly why we do Clark stings because you just added another element to the 23andMe bankruptcy I have not seen or heard or read anywhere. And that is so valuable that people need to check or uncheck that box as well so that there's no data that the bankruptcy court is going to sell off willy nilly to whoever is going to use it for nefarious purposes. There's not anything that I've seen anywhere that makes me feel that the bankruptcy court is going to respect anybody's medical privacy in this 23andMe bankruptcy.

[Caller/Listener]

Clark, you don't stink. But when discussing auto tariffs and how the US has done fine without them, I feel like you left out important historical context. The United States had 25% tariffs on light trucks since 1964. The chicken tax. I don't know why it's called that. This is why, unlike many other automobiles, domestic production of light trucks has remained high. This tariff still exists to this day. This is not to say that you're completely wrong on tariffs, but it's important to emphasize that they have never stopped being used by many countries around the world, including the US to protect domestic manufacturing. This is also why many developing nations impose tariffs on others. Alan.

[Clark Howard]

Alan, thank you. All right, so I haven't talked in years about the reason that US Automakers push pickup trucks so much and why foreign automobile manufacturers built auto plants in the United States just to build pickup trucks. Because we put a tariff wall around pickup trucks long ago. I didn't know it was 64. I thought it was later, but it made an artificial market by making us an island market for pickup trucks in the United States. It was a subsidy of the US Automakers and I don't like subsidies like that. It just is a thing. I I believe that you let the free market work and allow companies to.

[Caller/Listener]

Compete Online banking can have some problems I opened a High Yield savings account with one bank which falls under the umbrella of raisin.com based on Clark's recommendation. I've recently discovered that it's very difficult to get your money out since they created a cash account system where you first have to transfer your funds there which takes a few days, and then transfer your money from there into your own bank account which also takes a few days. All the while you are not collecting any interest. Totally unacceptable. My experience with Everbank and Fidelity is that the funds show up in your checking account the next business day.

[Clark Howard]

Heidi Heidi, thank you. I was not aware that they were putting that speed break in the process. I don't like it when you have your money in an online bank account and they put up roadblocks to getting access to your own money, also squeezing you for a few days of no interest. I don't like that either and I think we need to note that in our review of Raisin.

[Caller/Listener]

This is most definitely not a Clarkston's comment. This is a Clark save story. I was in the process of applying for a UK ETA and got to the checkout section where I saw that although the official fee was quite reasonable, the cost to process my application was not. A bell went off in my head and I recalled Clark's warning about scammers out there in the ETA world. Sure enough, I was applying through a bona fide looking site which was not the official uk.gov site. I'm very thankful that I caught Clark's podcast when he issued his warning about this sending gratitude from the Granite State Smokey, Smokey.

[Clark Howard]

Thank you very much. All right, so this thing with the fake sites pretending to be government or official business sites is not just for an ETSA for Great Britain or an ETSA for Australia. When the ETSA comes into effect for Europe, that keeps being delayed, delayed, delayed, delayed. This is for anything you can think of with local government, state government, the federal government. There are all these fakes out there that get you that con you to pay fees you're not supposed to have to pay and you think you're at the real government site and you're not. This is another search problem where people are searching for how to do whatever vehicle registration, a license renewal with a state or local agency or anything like that. And so you're searching for it and you end up at what you think is the real site and it's not. And it could be stealing information from you, but more often it's just ripping you off, charging you junk fees that don't exist. If you go to the actual real government site, be aware, be wary. And I'm glad that that alarm went off in your head and you avoided being ripped off.

[Caller/Listener]

Okay, several about this topic came in. I'm just going to read one a recent show. You stank like a plate of corned beef and cabbage left over from last month's St. Patty's celebrations. Disparage my country, the Republic of Ireland. It is not.

[Clark Howard]

I love Ireland. What did I do?

[Caller/Listener]

It is not a backward country when it comes to train transportation. It is far ahead of most of the USA between the major cities Dublin and Cork, Dublin and Limerick, Dublin, Galway and even Dublin, Belfast. Although an inner city bus service is just as fast and cheaper. Both are much better option for most U.S. travelers than renting a car to get out of Dublin and should be booked a week or two in advance for cheaper fares. Besides, the cost of a car rental there is catastrophic and most renters won't accept coverage from US credit cards. Most credit cards don't include the Republic of Ireland anyway. And I'd say note for good reason, I rented a car there. Unless you present a letter from the credit card's insurer to validate car rental coverage in Ireland. Yes, the roads in some rural areas are very narrow. If that bothers you, don't drive there, especially in a so called self drive vehicle. On another note, not so stinky. The reason for your 23andMe report showed Ukraine, Belarus and Lithuania was because these countries were under Russian control for most of the 200 years before recent independence. In the 1990s, anyone coming to America from Imperial Russia or the USSR had to have a Russian passport, even if they were born in what's now Ukraine, Belarus or Lithuania. I love your show, Jimmy.

[Clark Howard]

Jimmy, thank you very much. Truth be told, I was not aware of any meaningful train network in Ireland. So I really appreciate being set straight, which is so funny because I've been to Ireland so many times.

[Caller/Listener]

Yeah. Another couple said they had a wonderful trip using the trains in Ireland, but.

[Clark Howard]

What fun is that not driving on those two lane roads that are more narrow than a one lane road and you got hedges on both sides. I love driving there.

[Caller/Listener]

I didn't.

[Clark Howard]

I did not enjoy driving.

[Caller/Listener]

I was a wreck and I even wrecked the car a little bit. Like just the bumper. Anyway, Clark, your take on bitcoin stinks worse than a gym sock full of Limburger cheese left in a hot car. I just threw up in my mouth. I mean, I respect your frugal vibes, but when you start dissing bitcoin like it's a Ponzi scheme cooked up by a shady used car salesman, I'm over here clutching my digital wallet like, come on man, Bitcoin's not perfect, but your opinions on it smell so bad, I'm tempted to Febreze my car speakers every time you bring it up. Perhaps now that bitcoin is becoming more mainstream and the US government is putting it in a strategic reserve and corporations are buying it, you could consider recommending an allocation to a Bitcoin ETF as part of a healthy retirement fund like BlackRock and others do. Best regards, Jim from New Mexico.

[Clark Howard]

Jim, thank you. There has never been a time from bitcoin from crypto's get go that if I ever mention anything about bitcoin that we don't get, Clark stinks about it. All right, I'm going to keep this really short because I don't want to generate 18 more. Clark stinks. So bitcoin is a cryptocurrency, a blockchain kind of way of managing money. Having a store of value that is easily used for buying and selling things is ultimately going to be when crypto to me will be a useful form of currency. Right now it's a store of value, but people look at it as a speculative investment. Any crypto is speculation instead of a stable value. Something that you can have and hold and know within a very narrow band what it'll be worth day to day, month to month. We're not there yet. We're still in the infancy of crypto. And it's also why there have been so many thefts of crypto with various exchanges and the rest and theft from people's crypto wallets. So it is still a Wild west kind of thing. It is in the pioneering stage, not in the settler stage. And so it is something that can be too hot to handle. And that's why I urge caution always involved with crypto. That's all I want to say, because no matter what I say, it makes crypto people angry. So I'll stop there now. Coming up ahead, how did Fidelity Investments, one of my favorite children, end up being put in time out by me? I'll tell you straight ahead.

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[Clark Howard]

Time a Minecraft movie only in theaters. You know, recently I said in one of our company staff meetings, you know, this is the time when people worried about stocks are going to have annuities pushed on them. And then our center director of our Team Clark Consumer Action center said they had had three calls in the last week from people wanting to know what's up because they have investment accounts with Fidelity Investments and they were getting solicitation calls from Fidelity trying to sell them. I can't believe I'm having to say this cuss word again. Annuities, okay. Something you got to know about Fidelity that has driven me to distraction. Fidelity is doing the two hat thing where there are things they do, activities at Fidelity where they're acting as a fiduciary and then others where they're not. And annuity sales are a not. So you think because it's fidelity, you can just trust them straight out. But understand that annuities are an obscenely high commission product with exorbitant expenses built into them and hideous surrender charges. What's a surrender charge? You get the pitch, they tell you you can't lose here. This is the greatest thing ever. And you buy it, and then later it turns out it's not at all like they said and you want out. You may have to pay penalty fees for as long as 15 years just to exit the annuity. That never performed like the pitch you got from the salesman and the salesperson. Annuities are regulated by states, not the federal government. And in a lot of states, salespeople are given the latitude to say pretty much anything to you when they're selling you a piece of trash annuity. The defense that the states allow is, well, if they'd read the 182 page contract that came with the annuity, they would have known and they signed their name to it, that they didn't rely upon any oral representations, that the only thing that counts is the contract you sign your name to. Is it possible there could be an annuity out there that would be okay to buy? Yeah. And I've talked about when an annuity and what type of an annuity would be appropriate. But fair warning, because people are tweaked right now, worried about what's going to happen with their investments because of the tariff disruptions. People are especially susceptible and vulnerable right now to the con job annuity sales pitches. So is Fidelity doing a con job annuity pitch? Don't know. I've not heard one. I haven't heard what the people contacting us are asking. They're just like, hey, Clark says annuities suck, and then in turn says Fidelity is one of his favorite children. And then Fidelity is pitching me on an annuity. What's going on here? Good question. Good question. And I'd love if somebody from Fidelity wants to come on and explain why this is. Okay. But I don't like. I don't like any of these two hat situations where any financial planning organization or investment organization says, oh, well, yes, we wear a hat as a fiduciary. Oh, but we also wear a hat as a commission salesperson where we're not a fiduciary. I don't like it at all. It should not be that hard for a consumer to understand. So, yeah, anybody who says, I guarantee you you're never going to lose a penny, but you're going to benefit from the upside of the stock market. Ha ha, man.

[Caller/Listener]

First Southwest, now Fidelity.

[Clark Howard]

No, no, no. Fidelity is not Southwest. Broke my heart.

[Caller/Listener]

Right.

[Clark Howard]

Private equities. Anyway, Fidelity is a good organization. And Fidelity is still one of my favorite children. Southwest is no longer one of my favorite children.

[Caller/Listener]

What's.

[Clark Howard]

They cross the line?

[Caller/Listener]

Well, what's. You don't think this is crossing a line?

[Clark Howard]

I think this is terrible.

[Caller/Listener]

Yeah.

[Clark Howard]

And that's why I'd love to hear whatever Fidelity has explanation. There is no logical explanation for the garbage going on with the private equity owners of Southwest ruining that wonderful airline.

[Caller/Listener]

So maybe Fidelity's sort of like, you know, getting all A's. Except this.

[Clark Howard]

No, they're in timeout. They're in timeout.

[Caller/Listener]

Okay. Well, speaking of annuities, Anonymous in Iowa wrote in again and says, I wrote the Clark stinks about annuities having potentially very good returns. I heard a question about it from another listener, so I'd like to clarify some things.

[Clark Howard]

So it was someone who works for.

[Caller/Listener]

An insurance company as a customer service rep.

[Clark Howard]

Customer service rep. And said that I'm just too harsh on annuities, that there are these good features of them. And then somebody wrote in and said, that's a bunch of hooey. This happened. That happened.

[Caller/Listener]

The return that the original poster this Anonymous had sent in cited a really big return, like 100% or something, potentially.

[Clark Howard]

I don't remember.

[Caller/Listener]

And they were like, how can that be real? Okay, so here are the points. One, the return on that annuitizing, not technically by that name, but works similarly. This product is actually guaranteed for life by the company, assuming the company doesn't go broke. Of course, it is not hypothetical. It is guaranteed. It grows at a fixed interest rate independent of the market. But. But now for the bad news. Two, you can't trust, like, 90% of the people selling these products because, as Clark said, the commissions are very high and it attracts unsavory characters who borderline lie to get your money. 3. The surrender schedule is very unforgiving. Some of our worst products lock your money up for up to 16 years with a surrender charge of 10 to 20% and any amount you take will lower your lifetime income stream as well.

[Clark Howard]

4.

[Caller/Listener]

This process will leave little if any money for beneficiaries. And five Though we do offer a couple of these good products, in my opinion we also offer like a dozen rip offs. My overall conclusion is that annuities can be a powerful tool for a portion of your retirement funds, not all of it to people who know enough to act as their own financial advisors. Sifting through the rip offs and finding the few good deals, you also have to be sure you won't need that money anytime soon. But if someone offers one to you and you're not a financial expert, it's best to run away.

[Clark Howard]

So that is. That is an interesting follow up. Here's the problem. Let's get to the core of the problem. The insurance industry has used its lobbying power and the courts to prevent insurers from having to operate to a fiduciary standard, meaning that they be legally bound to do what's to the best interest of the customer instead of what's in the best interest to their salesperson and to the insurer. But particularly the problem in annuity sales and insurance sales has all been unsavory. Salespeople has really been the core of the problem and the insurance industry is terrified of being required to do the right thing legally. That's the real problem.

[Caller/Listener]

Drew in New York says our daughter will be going to pursue a Master's degree to university in Canada. McGill University.

[Clark Howard]

McGill.

[Caller/Listener]

It's a great school that is one.

[Clark Howard]

Of the best universities in the world.

[Caller/Listener]

Starting this fall, this will be a two year endeavor. Although she is receiving some scholarship money, she will need to come up with additional funds for tuition along with her living expenses for two years. Do you have any guidance on how to best hedge against a precipitous change in the US Dollar to Canadian dollar exchange rate? Should and can we try to establish a savings account in Canada and move funds into that account? Are there credit cards that our daughter should be getting that offer the most competitive exchange rate? We are looking into how a move to Canada will affect her car insurance. Anything else you can think of that we should consider as we start getting serious about this new chapter in our daughter's career?

[Clark Howard]

What a privilege for your daughter to be able to get her master's degree at McGill. It is for one of the elite universities in the world. The tuition costs are much lower than as best I know, any other elite university in North America. Congratulations. As far as the money, the Canadian dollar has fallen way down versus the US dollar. It's really depressed right now. Don't know if it's got more to fall or after the federal election, Canada concludes if the value of the Canadian dollar will rise again, overcoming the uncertainty of that and the trade relationship between the U.S. and Canada. So you could establish your daughter when she gets to Canada, can establish a savings account there. She can open a bank account relationship there. Canada is a big credit union country. It's great to have a credit union there. The big banks in Canada give even worse deals to their customers than the giant monster megabanks in the United States. So the university probably has a credit union or one they can refer her to to open an account that she has in Canadian dollars. Moving money is really easy now with Revolut or Wise, it allows you to. If you have a Revolut Visa card, you can deposit money into that account and then your daughter can spend it in Canadian dollars and get the most favorable exchange rates free of a whole bunch of junk fees. Doing it that way you can have a Charles Schwab account where she has a debit card attached to it and can withdraw money at ATMs or use it for purchases across Canada. And you're able to, with the least friction possible, move US dollars into a Canadian purchase. She can have any of the really good, no foreign transaction fee credit cards. We have a list of that, don't we?

[Caller/Listener]

Do we do.

[Clark Howard]

On clark.com she can get one of the 2% cash back cards and use it and not pay any foreign currency fees in Canada. The car insurance is a hard thing. It's set by province in Canada. How car insurance works for a foreigner, for a student. Every province does its own thing. US insurers will not insure a US driver in a US car for more than a short period of time in Canada can either be. Some insurers will allow seasonal, others only just a couple of weeks coverage with your US based auto insurance. So the university, a big university like McGill with so many students from around the world will have a foreign assistance department that will be able to advise your daughter on the best way to insure the vehicle in Quebec, if that in fact is something that is easily manageable. A lot of people will say it's just too much hassle to have a US registered car insured in Canada, but that may not be true in Quebec at all and I would expect the foreign student office will be able to assist her.

[Caller/Listener]

And Patrick in North Carolina says when I paid my federal taxes, I was charged a $25 service fee when I paid via debit card through TurboTax. What's up with a service fee to pay?

[Clark Howard]

Okay, Patrick, this came up a while back. So if you pay with a debit card and you're clearing it when you're paying taxes so often as a credit card, you paid the same junk fees as if you paid your taxes with a credit card. On the other hand, if you had linked your checking account number as the method of payment for the tax bill you owed the feds. This is a fee not by who was the tax preparation.

[Caller/Listener]

So this was TurboTax.

[Clark Howard]

TurboTax. That fee is not from TurboTax. It's for going through one of those third parties to pay your taxes as if it was a credit card. If you'd paid with a link to your checking account, there would have been no fee at all for paying your taxes. And I'm sorry, when I talked about tax prep twice recently during tax season, I only talked about how to get tax prep for free. I never talked about the junk fees paying your taxes with a credit card or debit card versus with an ACH from your checking account. And that was my bad. We did have a question about whether it was worth it to pay your tax bill with a credit card, but I never address this thing. Debit card versus an ach. That was my fail, Patrick. That's why that fee was there. And I want to thank you so much for joining us this week. I hope that you have learned things today. I certainly have, as I do every time. From Clark Stinks. And I thank you. I know it takes time and thought to do those posts. I really, really appreciate them. And this weekend I want you to know there's empowerment from us all weekend long. Empowerment through knowledge with our free newsletters. You can subscribe to clark.com newsletter or newsletters. Either works and [e-mail] and then all weekend long the deals we [e-mail] so be empowered. Have a fun weekend and I'll be at your service on the podcast and our YouTube show on Monday.