05.04.26 Invitation To A SCAM / How To Handle Debt Collectors

Summary

The Clark Howard Podcast

Episode: 05.04.26 – Invitation To A SCAM / How To Handle Debt Collectors
Date: May 4, 2026
Host: Clark Howard

---

Episode Overview

Clark Howard opens the episode by focusing on two core personal finance topics: protecting yourself against a deviously simple but rapidly spreading email scam and how to effectively deal with debt collectors. Sprinkled throughout the episode are listener Q&As on mattress buying strategies, organizing estate documents, using credit cards in retirement, authorized user credit implications, and the timing of credit card reporting. Clark’s tone remains practical, urgent where warranted, and always focused on empowering listeners to save more and avoid financial traps.

---

Key Discussion Points & Insights

1. Emerging Email Party Invitation Scam

[00:50-07:03]

• How the Scam Works: Criminals hack an email account, harvest its contact list, and send convincing fake party invitations mimicking apps like Evite or Punchbowl. Links within these invitations, when clicked, infect your device with malware.
• Why It’s Dangerous: If you click the link, you may install software that gives hackers access to sensitive data like banking, retirement, or brokerage account details.
• Spotting the Scam:
  • Look at the email sender: It will seem like a real party service but comes from a random email, not the genuine provider.
  • “Anytime you get a party invitation, before you ever click on the hyperlink... look at the sender information. And if it’s not actually from the email service that does the invites, you know you’re about to get scammed.” (Clark Howard, [05:45])
• General Rule:
  • “Anytime you get a message, text, email, whatever. Really think thoroughly before you click on a link.” (Clark Howard, [06:51])

Memorable Moment:

• Clark emphasizes that even his team of scam experts could have fallen for it, highlighting the sophistication of the scam.

---

2. Secondary Scams: Fake Toll Violations

[07:03-07:33]

• Clark notes a current wave of phishing scam emails about toll violations, allegedly from law enforcement, demanding payment and containing malicious links.

---

3. Listener Q&A: Mattress Shopping Tips

[07:33-11:51]

• Negotiation: The overcrowded mattress market gives buyers tremendous bargaining power.
• Brand Loyalty: Don’t limit yourself to one brand; use independent testing (like Consumer Reports) to find quality.
• Direct vs Retail: Many mattress makers now sell directly or via warehouse clubs, which often have good return policies.
• Key Advice:
  • “Retail prices of mattresses mean nothing.” (Clark Howard, [08:55])
  • “Buy only from a place that gives you the right to return for a refund.” (Clark Howard, [10:37])
  • Watch for instability; if a direct seller goes bankrupt, your return rights may evaporate.
• Seasonal Sales: Memorial Day is mentioned, but Clark jokes, “There's always a sale.” ([11:23])

---

4. Listener Q&A: Organizing Estate Documents

[11:51-13:36]

• What to Organize: Bank/investment accounts, home documents, digital information (including passwords), and notably, your phone’s passcode (critical for two-factor authentication).
• How to Organize:
  • Single binder kept at home or secure, reputable digital services (e.g., Fidelity, NIH.gov resources).
• Clark’s Family Policy:
  • “We all trust each other. Everybody knows everybody else's passcode into their phone.” ([13:24])

---

5. Listener Q&A: Credit Cards in Retirement

[13:36-16:40]

• Key Steps Before Retirement:
  • Assess and secure credit while still employed.
  • “Once you’re retired, it’s harder to get credit.” (Clark Howard, [14:09])
  • Have at least two cards (from different issuers).
  • Consider 2% cash back cards.
  • Set up a home equity line of credit (HELOC) if needed while still working.
• General Wisdom: Credit is easier to get before retirement; ensure you’re set up before leaving your job.

---

6. Main Topic: Handling Debt Collectors

[20:23-26:44]

• First Steps When Contacted:
  • Never assume calls are legitimate.
  • Demand written proof of the debt within five days (as required by law).
  • “Rarely is a debt collector contacting you about a debt who has any real idea... what you actually really owe.” (Clark Howard, [20:36])
• How to Respond:
  • Notify in writing to dispute a debt.
  • If you don’t challenge a debt within 30 days, it’s considered valid.
  • “You have got to write them and say ‘not my debt, I don’t owe this.’” ([22:44])
• Settling Debts:
  • Only pay after receiving written confirmation that payment settles the debt in full.
  • Never provide direct account info to shady collectors; use money orders.
• Scam Alert: Avoid companies that promise to “fix” your debt for upfront fees.
  • “There are phony baloneys out there pretending they’re going to be the hero to you…” ([24:55])
• Legit Help: Use nonprofit counselors via nfcc.org.
• Credit Reporting: Delinquent debts may fall off your credit report after seven years; statute of limitations applies.

---

7. Listener Q&A: Suspicious Debt Payoff Programs

[26:44–29:13]

• Red Flags:
  • Lack of transparency with fees
  • Multi-level marketing structures
  • High upfront costs ($5,000–$7,000 or more)
• Clark’s View:
  • “You can write down every debt you have... and figure out your priorities.” (Clark Howard, [28:30])
  • Avoid services that won’t tell you the price before committing.

---

8. Listener Q&A: Authorized Users & Credit Scores

[29:13–30:12]

• Social Security Numbers Needed: To positively affect an authorized user’s credit, supply their SSN when adding them.
• Precaution: You’re legally responsible for an authorized user’s charges — consider adding them as users without giving them access to the card if concerned.

---

9. Listener Q&A: Credit Card Reporting "Gotchas"

[30:12–31:34]

• Issue: Some issuers report balances to credit bureaus on random days, not just statement closing dates, harming credit scores even for users who regularly pay off balances.
• Advice:
  • To be safe, keep utilization under 30% at all times.
• Clark’s Suggestion: Contact your card issuer and urge them to use the closing date for credit reporting.
  • “There’s too many gotchas and this is obviously an example of one.” (Clark Howard, [31:34])

---

Notable Quotes

• On Scams:
  • “Anytime you get a message...really think thoroughly before you click on a link.” (Clark Howard, [06:51])
• On Debt Collection:
  • “They just harass you, make up amounts and all that. And debt collectors are not allowed to lie to you. Doesn’t mean they don’t.” (Clark Howard, [20:36])
• On Credit in Retirement:
  • “Once you’re retired, it’s harder to get credit.” (Clark Howard, [14:09])
• On Paying for Expensive Debt Software:
  • “You can sit down in a little while and write down every debt you have...I don’t recommend anybody signing up with somebody who won’t tell you the price.” (Clark Howard, [28:30])

---

Timestamps for Important Segments

• [00:50] – Introduction to party invitation scam
• [05:45] – How to recognize fraudulent invitations
• [06:51] – General rule for clicking links in messages
• [07:33] – Mattress buying strategies
• [11:51] – Organizing estate and digital documents
• [13:36] – Using credit cards in retirement
• [20:23] – How to deal with debt collectors (+ rights)
• [24:55] – Scam debt-relief companies
• [26:44] – Review of suspicious debt payoff programs
• [29:13] – Adding adult children as authorized users
• [30:12] – Credit card balance reporting practices

---

Tone and Style

Clark’s delivery is empathetic, occasionally humorous, and always direct. He repeatedly stresses vigilance — for both digital safety and consumer empowerment — and prefers tried-and-true personal finance strategies over high-priced products or services.

---

Final Takeaway

This episode arms listeners with actionable tips to spot modern frauds, instructions on defending their rights with debt collectors, and a steady stream of practical advice for managing everything from major purchases to retirement credit and estate planning. As always, Clark’s message is clear: stay informed, question everything, and never let yourself be rushed or intimidated into poor financial decisions.

Transcript

[Sponsor/Advertiser Voice]

When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job posts the boost it needs to be seen and helps reach people with the right skills, certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsored job credit@ Indeed.com podcast. That's Indeed.com podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored

[Clark Howard]

jobs now at McDonald's. A McDouble is $2.50 so you can get your gym gains on or just get lunch for only $2.50. Get more value on the under $3 menu.

[Sponsor/Advertiser Voice]

Limited time only. Prices and participation may vary. Prices may be higher for delivery.

[Clark Howard]

I'm so glad you're with us here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to so you make better financial decisions in your life. So I hate to start out this week on a negative Nelly note, but there's a new scam that several of our team members admitted would fool them. And think about it. We got people who work on our team who are so scam aware and they would have been taken by this one. And it's coming to your email inbox. I'm going to tell you what to watch out for later. I'm hearing from more and more of you about the stress of owing money, having bills, having debt. I want you to know how to know whether a collector contacting you is legit. And also where should you turn for legitimate guidance if you're looking for help to try to get your debts paid off or under control. We're going to talk about all that Today on our YouTube show and podcast. So there's a scam that has been growing. I've been reading stories about it and thought we would do it like a week ago and didn't get around to it. And then I read another story from a woman I just respect so much, Michelle Singletary, who's personal finance writer, the Washington Post. How it happened to her and this scam at one level is very clever, very deceptive, and another actually pretty simple for criminals to pull off. So I need to make sure you know because this will morph and it will become a way that criminals really make your life miserable. So I want to make sure you know, here's what happens. Criminal hacks into somebody's email and what they're after is your contact list and then they send out a fake party invitation to all the contacts of the individual they stole the information from. And so it looks like there's a party for Jim or Mary or whoever. And so a lot of those will go to people who don't really know the person whose party is. They're not even going to pay any attention. But what happens if in those contacts there's a good solid hit with a really good friend or relative and they get something that looks just like a regular party invitation from a regular party site? You know, the ones that do the invites? The one that Michelle Singletary got looked like it was from one of the regular ones and it was somebody she knew, but not well enough to be invited to their party. The other articles I've read about this have been pretty dry, you know, from security firms and stuff. So I thought Michelle's was so great because this actually happened to her and she almost fell for it. And it came on Punchbowl or appeared to be from Punchbowl. And this is the key for you to remember with any party invitation you get, it will come appearing to be from Evite or Punchbowl or any of the various invite systems that people use for a party, but they're not actually from any of these organizations. They just mimic exactly the look of their invitations. They'll have in them where it looks like you're getting it from them, but if you look at the sender, the sender is not from them. It was just, you know, a randomized email account. And they send these all out to the stolen list. So you may wonder, what are they after? Okay, if you click on the link in one of these phony party invitations, you have now downloaded really ugly viruses to your phone or computer that allow somebody to have access to everything on them. And what they're after, obviously are your bank accounts, brokerage accounts, retirement accounts, whatever, and your email stuff. So they can then do it to other people and then other people and then other people. This one's pretty serious. So, I mean, for a good while from now, I want you to remember this. And anytime you get a party invitation, before you ever click on the hyperlink in it, I want you to look at the sender information. And if it's not actually from the email service that does the invites, you know you're about to get scammed and get an ugly virus in there on your computer which puts your information at big time risk.

[Caller/Guest]

You know, I was just talking about this because you had shown me this article with a friend. I mean, I would totally click on that. It's insane that they can do that now. So.

[Clark Howard]

So, you know, you're busy, you're on your phone, you're distracted.

[Caller/Guest]

It's not even that even.

[Clark Howard]

Oh, so. And so is having a party.

[Caller/Guest]

Yeah, I mean, if I wasn't distracted, like, I might get an invitation to a party that's for another friend from somebody I don't know that well, but maybe they've emailed me before, so I'm in their email. It's just. It looks very real. So now we gotta check with people that they're really sending you an invitation.

[Clark Howard]

Okay, so here's the simplest base rule there is. Anytime you get a message, text, email, whatever. Really think thoroughly before you click on a link.

[Caller/Guest]

Yeah.

[Clark Howard]

Because the problems all come from clicking on those links. You know, when I got twice this week, what this one's running the rounds right now is the phony invoice for a toll violation. And it says that the, you know, it says it's from the police and they're going to arrest you and all this stuff unless you click here and pay the toll violation. The toll violation things have been running around for a while, but it was interesting. I got two of them this week alone.

[Caller/Guest]

All right, well, I'm going to start with Dan in Florida's question here. Clark, you might want to sit down for this one. My wife needs a beautyrest mattress in the $4,000 range due to her back issues. And I wanted to get your take before we go shopping. Is there any real room to negotiate on mattresses? Or is this one of those purchases where you just have to bite the bullet? It's not like I'm out buying diamond earrings. Also, is there a way to avoid the middleman and buy direct or any other strategies you recommend to save money?

[Clark Howard]

So, Dan, this is a great question because the mattress business has gone through enormous transformation. And right now there's a huge oversupply of companies making mattresses. So mattresses are very, very price competitive. That's why so many traditional stores that were just mattress sellers have gone bankrupt, closed their doors, whatever, because the business is overstored and over manufactured right now. So, yes, you have tremendous negotiating power. Also, this is an area that, gosh, I'm going to sound like the man from Consumer Reports. But Consumer Reports does thorough testing of mattresses by different categories. Inner spring foam. And they will tell you which mattresses they've tested, they recommend which ones are not only a recommendation, but are Consumer Reports Best Buy. And they'll give you what their best Guess is of street price right now on those, meaning what you should really be looking to pay. Because retail prices of mattresses mean nothing to part of your question. Buying direct. A lot of the manufacturers do sell direct. Also, the warehouse clubs are huge players in the mattress business. Now. I don't even know what percentage they represent now at costco, Sam's and BJ's wholesale, their huge market share of the mattress business. The advantage and the reason the warehouse clubs have gotten so big in the business is they usually have a period of time that the mattress can be returned for a full refund, which is very important because mattresses, even if a mattress works for somebody else, it may not work for you. And it's a product that's a big dissatisfier that people often buy one and they're like, well, I thought that was a good idea. And you're talking about how much money?

[Caller/Guest]

You say $4,000.

[Clark Howard]

Thousand.

[Caller/Guest]

But we don't know that they'll have that specific brand.

[Clark Howard]

They may or may not. They may or may not. But I would start rather than focusing specifically on beauty rest, a very well known and recognized and respected brand, I would start with Consumer Reports. Go to the library to read it for free. If you have online access through your library, you can see it for free. Or you pay Costco for access at Costco. Pay Consumer Reports for access to the mattress ratings, which I don't know what they charge for one time access. It's not a lot compared to what you're paying for. And then buy only from a place that gives you the right to return for a refund. A lot of the direct sellers of mattresses give you three months to decide if you're happy with it or not. And then we'll take it back for a full refund. Don't give any credibility to any store that says, well, we'll give you a credit towards another one. No, if you didn't like the brand, you want a refund and you want to start over.

[Caller/Guest]

And Memorial Day coming up is a big time when mattresses go on sale.

[Clark Howard]

You know, that's so funny you said that. Because the joke about the mattress business is there's always a sale, which is because right now the business is so overpopulated. And I should mention, when you buy direct, the industry has some instability to it. Now it's always possible you'd buy from a company direct that has a full refund policy and they go bust before you can exercise the full refund if you don't like it.

[Caller/Guest]

Mandy in Nevada says, my husband and I are in our 40s and we have two daughters who are 15 and 18. We just updated our living revocable trust and it got us thinking about other documents and information we should organize and have available for family members. When we passed, things we thought of were bank accounts, investments, house documents, and even digital information like passwords for websites and email accounts. Two questions. One, what do you recommend as a convenient and accessible method for putting all this information in one place? We considered using a single binder that we keep in our house. And two, are the there any other items or information we should also include? Thank you for your help and guidance. We really enjoy your show and have learned so much. And someone else had written in and mentioned Fidelity has a service for you to keep documents online. By the way, Fidelity Investments does.

[Clark Howard]

That's great to know. I mean we talked when we had this question before, we talked about, of all places, the National Institute of Health has a very good briefing on their website, nih.gov on what documents you should keep, what should be updated and all that. And there are several different lists. We have a list of what documents to keep and all that. Because this is something that people ignore at their family's peril. You just forget what you should make sure your loved ones know about.

[Caller/Guest]

Another one I would add, by the way, that people don't think about is the password to your phone because it might be your two factor authentication. Somebody should be able to have the, the code, the PIN code to get

[Clark Howard]

into your phone 100%. So in my family we must have terrible security. But we all trust each other. Everybody knows everybody else's passcode into their phone.

[Caller/Guest]

All right. Craig in Colorado says, I've routinely used a credit card for expenses and faithfully paid 100% of the balance monthly, thanks to a steady paycheck. Now I'm getting ready to retire where of course my income will be fixed, Social Security, and my portfolio withdrawals. Is it wise post retirement to continue to use a credit card for expenses as I have been, or is there another approach that is recommended?

[Clark Howard]

Well, Craig, your question is so timely, I can't believe it because this is perfect. And congratulations on your upcoming retirement. Before you retire is when you really assess what credit you're going to need in the future because once you're retired, it's harder to get credit. So you say you use a credit card. I want you to have more than one in retirement because if the issuer you're with at some point decides that they don't want you anymore, then you don't have the ease of being able to get another credit card. So I want you to have them from two different issuers and make sure you have this taken care of before you retire when you're still reporting your work income. And yes, absolutely, since you're a net payer, you pay in full when the card comes and all that. Absolutely great for you to use credit as a payment system. You might even consider if you get another card getting one of the 2% cash back cards where you get 2% back on minimum on everything you purchase over the course of a month on that card because then you're paying 100% of your balance but you're getting the benefit of 102% of what the balance is. So that is what I would recommend to anyone approaching retirement is make sure you have all the credit you might need in retirement. Another example is if you're privileged enough to be a credit union member instead of being with an inferior bank you set up. Because most credit unions do a home equity line of credit at no closing costs are very very low, unlike the banks and they tend to offer a better rate on a home equity line of credit than a bank. And so you can set that up before you retire if you have a lot of equity in your home. If there might be an oops while you're in retirement, you need access to any of the equity from the home to repair something or replace something at your home. You have that HELOC already set up while you're still working. And speaking of credit and debt, oh man, we got to talk because people are going delinquent on debt at what apparently is a record rate. Don't know if it's record rate inflation adjusted. There are two aspects of this I want to address straight ahead.

[Sponsor/Advertiser Voice]

Self directed Investing Trading Full service Wealth Management Automated Investing Financial Planning Thematic Investing Retirement planning Few. And to think that's just a small taste of what Schwab offers. Because Schwab knows that when it comes to your finances, choice matters. No matter your goals, investing style, life stage or experience, Schwab has everything you need all in one place so you can invest your way. Visit schwab.com to learn more. This episode is brought to you by AT and T Business. For business owners, connectivity is key. If you are starting your business today, that would be your first concern and your first decision. Reliable connectivity is essential to launching whether you're local or national. For a business owner, it's a decision that pays benefits every day and in every aspect of your operation. AT&T business is a reliable provider for small business owners. For Small Business Month, we celebrate small businesses by helping them run better. This means reliable uptime, Easy Switching Smart Communications powered by AT and T Business Built to Work Get AT and t [e-mail] this episode is brought to you by AT&T Business. For business owners, connectivity is key. If you are starting your business today, that would be your first concern and your first decision. Reliable connectivity is essential to launching whether you're local or national. For a business owner, it's a decision that pays benefits every day and in every aspect of your operation. AT&T business is a reliable provider for small business owners. For Small Business Month, we celebrate small businesses by helping them run better. This means reliable uptime, Easy switching Smart communications powered by AT&T Business Built to Work Get AT and t [e-mail] Scaling a business takes the right expertise at the right time. Upwork helps growing teams quickly bring in specialized freelancers so you can move faster and take the business to the next level. Upwork is a one stop platform to find, hire and pay expert freelancers across web and software development, data and analytics, marketing, business operations and more. Upwork helps grow your business by giving you fast access to specialized talent across 125 plus categories so you can fill skill gaps, launch projects faster and scale support up or down without committing to full time headcount. You can browse profiles, review past work and get help scoring the role so you can hire with confidence and get started quickly with business. Plus you can access the top 1% of talent on Upwork and with AI powered shortlisting you'll get matched to the right freelancer in under six hours. No endless searching required. Upwork also cuts down operational hassle by handling things like contracts and payments in one place so you can spend more time running the business. Thousands of growing businesses already trust upwork to hire flexible high quality freelance talent for everything from one off projects to ongoing support. It's free to sign up and posting a job is easy. Visit Upwork.com right now and post your job for free. That is Upwork.com to connect with top talent ready to help your business grow. That's upwork.com upwork.com Investing with Schwab is like spending a Saturday at a great farmer's market. You can fill your reusable tote with a bit of everything. Maybe you go for some free range self directed investing or perhaps you pick a few farm fresh trades while you peruse. You can even get help from a dedicated advisor. That's full service, wealth management. Mix, match and change your mind whenever you want. Because at Schwab, you can invest your way. No matter your goals or appetite for investing. Schwab has everything you need all in one place. Visit schwab.com to learn more.

[Clark Howard]

It's been almost exactly a year since I addressed an uncomfortable topic. And that is, if you start hearing from debt collectors, what are you to do? And you have rights that you may not be aware of. And one thing, in a time where there's a lot of people worried about debts or having debts, there are rogue debt collectors out there. You got to be really careful and know that they really are a real debt collector, that it really is a debt you owe. And let me tell you something about debts. Rarely is a debt collector contacting you about a debt who has any real idea what if it is a legitimate debt, what you actually really owe. I mean, they just harass you, make up amounts and all that. And debt collectors are not allowed to lie to you. Doesn't mean they don't. They're not allowed to harass you. Doesn't mean they don't even if you owe a debt. But let's say, well, I was expecting this. You get a call. You don't have to accept calls from a debt collector. You even have the right under the law to notify them in writing. And they're not allowed to harass you anymore. They're not allowed to call all hours of the day. Call after call after call. Shame. You threaten you any of those things. But the very first step, if you are being contacted by a debt collector, you want proof of the debt. A legitimate debt collector, once first contact is made, has to provide you proof of debt in five days. And that proof comes to you in writing. It says who the debt is owed to, what the amount is they're seeking, and other facts about the debt. Remember, there are complete rogues that will contact you about debts that don't exist and intimidate you into paying a phony debt. There are debt collectors that will intimidate you into paying them on a legitimate debt. But an amount you don't owe, you have got to stand up for yourself. And once you have informed a debt collector in writing that they cannot contact you about that debt, they can never contact you again about it, except to tell you that they're turning it over to so and so law firm or something like that for legal action. Talking to a collector one time isn't necessarily a bad thing. And if it's a debt you don't owe, you say I don't owe any such debt. But that's not enough. When you get the notice from them of the debt in writing, you then have to write them back because talking to them doesn't matter and you dispute the validity of the debt. You know there's an old expression, politics. A lie on challenge becomes the truth in 24 hours. With a debt collector, you don't challenge a stated debt within 30 days it's looked at as a valid debt. You have got to write them and say not my debt, I don't owe this. And then you add something else now that you've been notified. If you report this on my credit report, I will sue you for listing a debt you've been notified is not my debt. You stay tough. You stay strong. Let's take a different circumstance. You realize it is your debt and you want to settle. You want to pay. You need in writing that payment of X dollars is payment in full against this debt. It must be in writing before you pay them anything. Period. If the debt collector seems really sleazy, do not ever give them your credit card number or checking account number to take money from you. Pay them only by money order so they don't have the ability to go back later and take more money from your checking account or post more charges on your credit card. You don't think this happens? Let me tell you, it does. Being a debt collector is a very difficult job and a lot of people do it exactly as they're supposed to. Follow the law, exactly as written. And then there are a lot who don't. You have to be prepared for those who don't. And if you don't have the money, you don't have the money and you tell them that, what are they going to do at that point? And I talked recently briefly about the debt relief scams. I want to tell you over and over again there are phony baloney's out there pretending they're going to be the hero to you and help you get rid of your debts or reduce your debts or all the rest. All you got to do is pay them X number of dollars up front. Scam, scam, scam, scam. There are legitimate nonprofit organizations you can go to to get debt counseling and negotiate a payment plan with who you owe money to. You can find legitimate [e-mail] again nfcc.org and if you owe money and it feels hopeless and out of control, know that Time heals everything. If you can't pay your debts after a period of time, those debts don't go away, but the chance they can sue you against them does. They can't be on your credit report depending on the debt past a certain time, at most seven years. So know that your finances can heal many different ways. There is hope and there are paths.

[Caller/Guest]

Krista all right, this first question is from Jasin in Georgia. What are your thoughts on. Do you want me to read the.

[Clark Howard]

No, don't read the company name. I'm familiar with them.

[Caller/Guest]

It will not give me a price and I have to sign up for a consultation. To sum it up, the program apparently is purposeful with every dollar going to where it will save you the most in interest. However, when websites don't put a price for services, it makes me wary. A colleague uses this and they said it's helped them immensely. Please give a review and for what kind of sit situation it would be worth it. How much should I pay for a program like this? Clark? Keep in mind that I'm asking what a normal person would pay, not what Clark would pay. Maybe Krista should answer this last question.

[Clark Howard]

Okay, so we had a similar call like a month ago or so for a different organization and this is one that is controversial. It has not been declared a scam, but is a little, I'm a little uncomfortable with what they do. It is almost a multi level marketing organization and they're not talking about the fees because they're many many thousands of dollars. I've seen when I was dealing with the questions about the other organization a while back. This one's charging like five, $7,000 somewhere in there and it's supposedly for some kind of magic pill payment system where you use your paycheck to have it automatically go to wherever it would have the greatest punch with paying every bill and it is digging yourself a hole up front with the amount of money you have to pay upfront. I don't like these systems. We don't have enough bills in our lives hopefully that you would need to spend thousands of dollars for some fancy dancy computer system. You can sit down in a little while and you can write down every debt you have Jas and how much you owe, what the interest rate is on each and figure out your priorities with your debts. And I don't recommend anybody signing up with somebody who's who's talking about how this is the greatest thing ever and you ask how much does it cost and they won't tell you that spoke everything you needed to know Mike in

[Caller/Guest]

North Carolina says, I've added my adult children as authorized users on my credit card with the thought that it might help their credit scores. If I'm not required to add their Social Security numbers when I add them to the cards, then how does this help them? Will the credit bureaus know how to identify them?

[Clark Howard]

You are exactly right Mike. You only help authorize users if you do give their Social Security numbers and then it will populate on their credit report. From most issuers it will populate that they are an authorized user on that credit and it should help in many cases with their credit. Now on the other hand, you are responsible for whatever they charge. You can make them an authorized user, not tell them about it, not give them the plastic if you're worried that any of your adult children might have a spending problem on your credit line

[Caller/Guest]

Jeff and Georgia says when you've spoken about this topic before, the last time I heard you talk about it it wasn't clear to me since my credit was recently dinged by this. I investigated what happened and would like to share the results of my research with you and your listeners and viewers. I have a USAA credit card with a 2000 doll limit. I got it for the bonus points on certain purchases. While I'm familiar with your warnings about possible damage to credit from using over 30% of the available to credit, I assume that if I paid it off completely at least two times per month and never carried a balance, I would not get dinged for maxing the card out in order to maximize my points benefits. I was wrong. I now realize I was unwittingly paying a timing game with my credit. I now know that once a month USAA reports my balance to the evil credit bureaus on that day, whatever the balance, that is what gets reported. And you guessed it, on that day my balance was the full $2,000 ding. I was not able to get an answer from the from USA on what day they report my spending details to the bureaus. The lesson I've taken away from this is as follows. To be safe, I now assume that a credit limit of $2,000 is really only a credit limit of $600. Live and learn, right? By the way, I'm an attorney and it would not surprise me if in the not too distant future we see a class action lawsuit against the credit bureaus and credit card companies relating to these evil deceptive practices.

[Clark Howard]

By the way, you are the second person we've heard about this and the other was not a USA card that I can recall. So normally what happens is if you get your balance paid in full before the closing date that by tradition and normal is what balance is reported to the credit bureaus using a randomized date not around your closing date is thank goodness not the normal way it's done and it is potentially harmful to a customer. I would express USAA is supposed to be a member focused organization. I would send a note to the they disclose who all their officers are. I would send a note to the head of their banking operation asking that they instead report closing balances instead of randomized dates because it's like a gotcha. I mean isn't what should really be going on is what risk you represent to that lender on the day that the balances are reported based on the closing date of your statement. That's my opinion and I just don't like it that there's too many gotchas and this is obviously an example of one that I can't think of any legitimate business reason or banking reason that USA and I'm sorry I don't remember the other bank that we had this about would be doing this to their customers. The theory is that you can charge to a card through a month pay before your closing date and that be the reported balance and would significantly and does significantly improve your credit score by paying before the closing date. This randomized kind of thing is obviously hurtful to people who do that and will in effect lower people's credit scores. Thank you for sharing that story with us and maybe we'll hear from somebody at USAA and I want to thank you so much for joining us today. Know that there's something we do here that we've been doing for 33 years plus and that is provide one on one advice for free. If you have a question you need answered. If you go to clark.com and you go clark.com cac you'll see how the Team Clark Consumer Action center is there and available to answer questions for you one on one. Again, this is a free service for these 33 plus years and sometimes you got something that you just don't know what to do and it's just part of the empowerment we offer is part of what we do in so many different ways with Team Clark to give you knowledge that gives you the power so you save more and spend less and don't let anyone ever rip you off. And we'll be back at your service on Wednesday.

[Sponsor/Advertiser Voice]

Starting a business can seem like a daunting task unless you have a partner like Shopify, they have the tools you need to start and grow your business. From designing a website to marketing to selling and beyond, Shopify can help with everything you need. There's a reason millions of companies like Mattel, Heinz and Allbirds continue to trust and use them. With Shopify on your side, turn your big business idea into Sign up for your $1 per month [e-mail] specialoffer.