Caller (7:25)

Okay, Philip in North Carolina has a travel question. We've booked a tour to New Zealand in March of 2026. We want to fly business class from Dallas Fort Worth or an airport on the west coast because business class airfares are not competitive. From North Carolina, I have a trial subscription to going.com which will expire soon. Is it too early to book fares? Should we pay for going.com subscription and then watch the fares for a few months and then decide? We see that the cheapest business class fares today are one stop in Fiji using Fiji Airways. We don't mind those extra three hours, especially since it will be in business class. But is this a reliable airline?

Clark Howard (8:03)

All right, Philip, this is a great question. I never see complaints online a lot about Fiji Airways. I've got no experience hearing from people. Now I will. Well, let me tell you what Fiji Airways did to me. But something you need to know. Their business class is not created equal flight to flight. Some flights have just basically almost like a premium economy where it's a recliner, and then other planes they have have full life flats. So when you book, if you do book with Fiji, you got to look at the equipment. Look@seatguru.com and you'll be able to decode. Are you actually in a real business class or a pretend business class? Because the savings aren't worth it if it turns out you're in something like a glorified premium economy pretending to be business class. Now, I do want you to know that you should sign up for Fair Alerts from Air New Zealand. Sometimes you'll see a deal on Air New Zealand that discounts the business class if you treat New Zealand as a stopover instead of your final destination. So you have to suffer by going to Sydney or Melbourne or something like that in Australia and you get a much cheaper price on your trip to New Zealand that way. So sign up for those alerts, pay for the premium Going newsletters so that you'll see the business class fares because you have to sign up for the premium one to see the cheapest business class fares.

Caller (9:48)

Speaking of that, this is from Dennis in North Carolina. Clark, you mentioned that Going was a great site for flight deals. Which option do you use? Limited free, premium 49 a year or elite $199 a year. The going website suggests that one gets the best deals with Elite, but I don't think you would actually spend that much for a subscription. Am I confused or what?

Clark Howard (10:09)

Dennis, I'm going to blow your mind. I spend the money for Elite because I travel as I've talked about. I travel roughly 30 weeks a year. And so I want the best deal all the time. And when we take a fun trip, not one that I'm going somewhere for work or whatever, we let the deal pick our destination. So we get these crazy deals that are really phenomenal. In fact, Krista, you tipped me off before I saw it to an Elite deal ongoing where we were able to redeem points for business class at a great price to Santiago and Buenos Aires. And so Wayne and I are going in the winter to South America which will be summer there at redeeming points at about a level you would for coach where going to be lie flatbed. So yeah, one time you get a deal like that, it's worth the $200 a year if you travel quite regularly. If travel is a less frequent thing but you do travel half a dozen or more times a year. I would say the premium is the right one. The limited is really just almost like a teaser, the one you get for free to try to get you interested, intrigued. So you sign up for one of.

Caller (11:38)

The paid levels and Logan in California says I'm in my mid 20s and single in California with an income of about $125,000 a year. Between my employer and I, we contribute 14% to a traditional 401k in addition to me maxing out my Roth IRA and HSA.

Clark Howard (11:55)

My goodness, in mid 20s doing this.

Caller (11:57)

And smaller contributions into a traditional brokerage. Given the high tax rates I'm subject to, does it still make sense for me to contribute to a Roth 401K instead of my traditional 401K? That I've been doing. I have started listening in recently and heard you recommend more Roth at a younger age. But with my tax rate so high between federal and California state, it just doesn't seem to be that beneficial.

Clark Howard (12:20)

So the federal tax rate would make it absolutely worth doing a Roth 401k instead of traditional your federal rate, even though your marginal rate may be at 24, your effective tax rate is probably more like 18 because remember, it's only your marginal means. Only your your dollars above a certain threshold are taxed at 22 or 24%. So no doubt under the federal, the Roth 401k would be the superior choice. Here's the hard part though. California has a very progressive income tax, which means that the tax brackets go up in a hurry. You're probably at the California 9% rate and even when you blend that at the various levels, you're probably paying 7%, 7 and a half percent effective California income tax. So that means you're now paying 30% combined. I would still say at 30%. Do the Roth 401K as much as it hurts. The exception would be if your intention, and this is such a hard question to ask, you are in your mid-20s talking about 40 years from now, are you going to go live in a zero income tax state? Who knows what tax rates are going to be 40 years from now at the state level. But at the federal level, because of the ridiculous federal budget deficits we're running and the accumulated federal debt, there is zero doubt that federal tax rates are going to be higher in the future. So I think it's still worth it for you to do the Roth 401K. So you know you've paid the tax, you're done. That money is going to be yours tax free. Way down the road you're going to have the compounding of that money and the investments you have in the 401k. Maybe you just do target retirement fund way down the road and if you've got X dollars in it, you have X dollars to spend. If you're In a traditional 401K, you got X minus 30% more or less. Whatever your tax rates end up being later. If it were me, I would go Roth 401k. 40 years from now I won't be around for you to be mad at. But that is the choice I would make. Coming up ahead. People accumulate these mountains of points and miles and now the big thing, the credit card companies mimicking the airlines and the hotels with points and miles. But guess what? They can devalue them too. And they're starting to.

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Clark Howard (17:24)

So the points thing is something that I've talked about for years. With the devaluation of points, Southwest Airlines recently devalued their points suddenly meaning somebody who was thinking, oh, I'm closer and closer to the goal of that free ticket. Suddenly, Southwest moved the goalposts and said jokes on you. And this happened throughout the travel industry. It's crazy when you look at Marriott and Hilton and you look at Bonvoy and you look at the Hilton Honors program, how the number of points required for a free stay keeps going up, up up and away. And so you're chasing it. And then it turns out it's fool's gold. And now Citibank is fooling around with devaluing their what they call thank you points. Remember when Citi changed how the double cash worked and I freaked out because double cash was so simple. You were getting 2% cash back. It was cash that came to you if you wanted it. Now it's all these goofy points which then gives them the ability to just one day wake up and say, you know what, we want to increase our profits so we're devaluing people's points, points sitting there, airline, hotel, credit card, whatever. Remember, they are their points, they are their miles. And if they want to change how they work, you need to know that the change they make is never in your favor. So people will build up these points and they feel great about all these points they have. You want to use them now. I've talked about the advantage for travelers instead of being point loyal to the airlines, have talked about doing so with the cards, the expensive travel cards, the Amex Platinum, the Chase Sapphire Reserve, the Chase Sapphire Preserve which has affordable annual fee 95 bucks or 99, 95. And then the Capital One Venture X and a lesser extent Capital One Venture so far knocked on Formica if you hear that. So there's no real wood in here. So far none of them have done any experimentation with devaluing their points. And I found that it's been very, very useful for travelers with those cards. All three of them, the Chase product, the Capital One and the Amex have been great for transferring points when you want to redeem for an international trip on an airline, particularly if you like to fly premium, economy or front of the plane. It's been a great redemption opportunity being able to check availability, know if there's availability and then transferring the points to an airline partner. I've also found amazingly something I never thought I would do. But I've found opportunities. Transferring points from time to time to hotel programs where I've been able to redeem stays that are on saver or promotion or whatever, where I'm not sitting there with points in any of the hotel programs, I just have empty memberships is like shells and then transfer points from a travel card, an independent travel card rather than the hotel chains own. So so far what Citi seems to be testing the waters with is not a common practice with the credit cards. And I think it would be really dumb idea. Doesn't mean they won't do it through the industry. But they lose their credit when they start doing it. And just know that a point sitting in an account unused is a point that could be worth less the next time you look.

Caller (21:46)

Questions? Time. This one's from Edward in Virginia. My wife and I own a 2011 Toyota RAV4 with 185,000 miles. The vehicle has been incredibly reliable. However, due to the age, it needs a new. It needs new wheel bearings. We are looking at repairs of approximately $1,000 per wheel bearing right now only.

Clark Howard (22:05)

Seriously?

Caller (22:06)

I know right now only one wheel is bad, but I anticipate the others may be going. Not to mention that no engine or transmission lasts forever. I'm a longtime listener, and I remember your advice was always, if the repair cost approaches the value of the vehicle or half the value, then it may be time to send it to the Toyota afterlife. My wife says whatever it costs, we should pay to have it repaired. Her logic is that a new car could cost $35,000 or more. So why wouldn't we repair our old Toyota? So I do not think this is sound logic. Can you help settle this debate?

Clark Howard (22:39)

Okay. Your wife is always right. Not necessarily repair, no matter what it costs. But a RAV4 Toyota product holds value so well that this is still worth, let's say, 3,000 or so dollars for this RAV4, the repair is 1,000.

Caller (22:59)

Well, it's 4,000 if you do all four wheels.

Clark Howard (23:01)

Yeah, but right now, only one is back.

Caller (23:03)

Okay. Yep.

Clark Howard (23:04)

So I think it's worth the gamble because a monthly payment on a vehicle, if you were. If you were taking out a loan for it, is often around $700 a month, more or less, many times more. It's not unusual for payment to be over a grand now on a vehicle. And that's the cost of this repair. If you get a couple of months out of the vehicle and then you cry uncle, she's still right. Because you bought yourself more time in the vehicle. Now, we're talking just money here. Most people who've kept a vehicle 15 model years are like, okay, this is incredible. We've kept this a long time, and we'd love to have something new. And once you get past 10 years, that's fine to do. But you're. If you're asking me just straight money and not like, wouldn't it be nice to have something newer, more reliable? If it's just money, she's right, Edward.

Caller (24:04)

Brian in Wisconsin says, I received gift cards to a restaurant I won't use. I've heard about websites where you can sell them for a little less than their face amount. Can you recommend any legitimate sites?

Clark Howard (24:14)

So little less depends on the restaurant chain. But figure you're going to get like 70 cents on the dollar somewhere in there. For a typical national chain when you're selling a gift card, there are sites that are legit. Let's say you're a buyer, you're paying a spread. So let's say the seller gets 70 cents on the dollar. You might be paying 80 cents on the dollar to buy a card for that restaurant chain. So yeah, you can turn that into money. Be very careful. We've done the best we can in an article we update@clark.com to know which of these gift card exchange sites are on the up and up. As best we know, there are some out there that are really sketch though. So be careful where you would attempt to buy a card, where you'd attempt to sell a cart. One of our reviewers favorite@clark.com is card cash and so you can see what that restaurant card would be worth there. It's not the only one out there, but you can check out our reviews. As a buyer, if you want to buy gift cards at one of these exchange sites, only buy from one that guarantees if the gift card has been looted, if it's empty, that they stand behind it and the money you have paid.

Caller (25:50)

Angie in Texas says I love to read. I'm an Amazon prime subscriber so I take part in their first Reads program. It's my choice of one to two free new Kindle releases from a short list of curated options. I also use Libby in the public library, but I live in a small rural town and that's more of a supplementary source of reading material than my main one. I have a couple of friends who subscribe to Kindle Unlimited and or other book subscription programs, but I can't remember that having been covered by Clark. Are they worth the price overall and or for certain readers?

Clark Howard (26:22)

So the unlimited it's like it's 12, 15amonth.

Caller (26:26)

It's 12amonth after. You can do a 30 day trial though. And they have like over 4 million titles. So I would do a free trial and see what if you're finding all these titles like if you think you would use it.

Clark Howard (26:38)

So Angie, here's my thing on it. If you are a voracious reader, you read all the time. It's worth it for you to pay 150 bucks a year because if you think about you go to we used to have these things called bookstores. You go in to buy A book, physical book, how much you're paying for it. If you're reading like, I know there are people who are super readers and they're reading like a book a week.

Caller (27:07)

My mother reads more than one a week.

Clark Howard (27:09)

Really? I mean, if you are Angie, somebody who's reading all the time, you read a ton of books. Absolutely. It's worth it for you to do this subscription. And who knows when Amazon lures in at that price and then raises it to a point. It doesn't make sense, but I'd say it under is going to be crazy. But if you're reading more than a book a week or reading a book a week, it absolutely makes sense for you to be able to read what you want and pay for that subscription. That's right. You heard me say to pay for something. Have I lost my mind? Well, if you think I have. What? We have a long list@clark.com of the best places to find free ebooks in addition to what you already said in your question. So have an absolutely great day. Think about how you can save more in your life, spend less, and absolutely avoid getting ripped off. And I know there are times when you hear me talk about in industry, like talking about the airlines and the hotels and the banks misbehaving, and you can become a cynic. But the reality is there are lots of people doing the right thing in a business day after day, thinking as they should, about how best to serve the employees that work for them and in turn the customers that buy from them up. And I think most people out there are doing the right thing. So don't be a cynic. You want to be skeptical? Be skeptical, but no room for cynicism. And have an absolutely great day.