Transcript
Sponsor Voice (0:00)
This message is brought to you by Apple Card. You earn up to 3% daily cash back on every purchase without limits. Visit Apple Co CardCalculator to see how much you can earn. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch terms and more at applecard.com @capella university you can.
Capella University Voice (0:19)
Learn at your own pace with our Flexpath learning format. Take one or two courses at a time and complete as many as you can in a 12 week billing session. With Flexpath, you can even finish the Bachelor's degree you started in 22 months for $20,000. A different future is closer than you think with Capella University. Learn more at capella.edu fastest 25% of students cost varies by pace, Transfer credits and other factors. Fees apply.
Clark Howard (0:52)
It's great to have you here on 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. Today's episode I'm going to talk to you about the recession that the airlines are in and other parts of the travel industry starting to show hints of going into a recession and what that means for you. There's also a lot of confusion about the restart of collection efforts, interest accruing payments required on student loans of all types. And I want to tell you what you need to know. If you or a family member have student loan debt, what you've got to be doing right now, okay? Lot of talk in the travel industry that they're already in a recession. Funny thing, one exception to that potential or possible recession, they're in cruise lines. Cruise lines are more surprised than anybody that their bookings have remained intensely strong. But if you flip from cruises, which ironically enough they're completely discretionary and their bookings are at least for now, rock solid. The airlines, from the deep discounters all the way to the full fares, they're all singing the blues. And there are different reasons for different sectors. Corporations, because of the uncertainty of the economy right now, one of the first things they cut is what is considered to be discretionary business travel. So the full fare airlines, American, United and Delta, are seeing a decline in bookings from their corporate customers. The discounters, the deep discounters and leisure oriented airlines are seeing a decline in bookings from their passengers, which are completely discretionary travelers. And so all through the industry there are airlines being brought to their knees. JetBlue, which is if you could call it a premium leisure airline. They're really hurting for certain right now because they Tend to try to get a higher price from leisure travelers who are saying no go right now. I'm not doing that. So the airlines are all either announcing or planning cuts in service. They're going to park planes in the desert if they have to. Some of the deep discounters are actually not going to fly at all certain days of the week. The soft travel days in the airline industry are Tuesday, Wednesday and Saturday. You see a lot of flight cuts on those days. Got something to say about that? With the airlines cutting their schedules as we move through 25, there's an opportunity and there's a hazard. Let me deal with the hazard first. If you've booked a flight more than a month out, which most people buying a leisure ticket are booking more than a month out, if you've done that, you need to check continually that your flight is still going as scheduled. I'm already receiving schedule change notices for flights later this year, but a lot of people book through third party sites, Expedia, Priceline, whatever for air. I'm trying to think of different third party sites. Could be a credit card booking site, whatever. Not booking direct from an airline gets lost in translation. A lot of times when you book through a third party site and nobody ever tells you that there's a schedule change, you're going to have to be proactive. The good news with a schedule change is let's say you picked a flight because it was the cheapest. You know, at that time of day, it's not really the time of day you want to go. Well, if you have a schedule change on the flight for free, you can move to the flight you really wanted. That was more money to book because the airline canceled your flight. If they discontinue non stop service in the market you were flying, that's a whole different game because then you're between a rock and a hard place. You either accept a rebook that has you changing planes with the inconvenience of that, or they have to give you a refund, not a credit. They have to give you a refund and then you have to start over booking a flight that you're happy with, that's a non stop. What I recommend is if you find a flight on somebody else you're really happy with, book it in that 24 hour period, you have to cancel that new booking. No penalty, no cost, you're just out of that reservation. But you have that bird in the hand if you want it, if you have. The only reason you would do that is if you call the airline involved and you want your rebooking or you want your money back and they come up with an accommodation you're happy with, then you've got that 24 hours for the replacement booking that you did on specific to cancel it. No harm, no foul. That's a lot to say. Now where's the opportunity? I said that's the hazard, the opportunity. It takes a while for airlines to cut back their schedules and park the planes. So the airfare sales going on right now, domestic and international, have been really, really good of late. That's because airlines are flying around with excess seats and so you can take advantage of that in this window before the planes are parked. I've noticed especially a lot of deals. We always have deals starting in early to mid August, the back half of summer. There are more this year because again, it's before the airlines have successfully parked their planes and cut back the schedules, but they've got those seats to sell. Oh, and, and, and I always say reshop every phase of your trip before you go. Especially helpful right now with airfare you bought a while back to reshop it either for credit with the airline because the fares are cheaper, or if you can hold that credit because there's a much cheaper fare on another airline, you'll fly somewhere else on who you bought the original ticket on within a year of when you bought it. Then you got that credit for future travel and a much cheaper flight for when you're going more currently. Hope that all made sense.