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CNN Sunday Morning

Interview with Marliss Harris

Aired May 05, 2002 - 07:51   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: All right, you like to save a little money? Why not? We all should be saving a little more money. The May issue of "Consumer Reports" features 50 ways to do it. It's going to cost a little scratch to get the "Consumer Reports," but probably worth it.

Joining us with some of that advice, and it's free, as long as you pay your cable bill is Marliss Harris, who is the finance editor for "Consumer Reports."

Marliss, good to have you with us.

MARLISS HARRIS, "CONSUMER REPORTS": Thanks, thanks for inviting me.

O'BRIEN: Marliss told me on the break normally she's at home sipping coffee, watching us. Today, you're a part of the program. Hope you're taping this. You can watch it later or something, right?

HARRIS: Absolutely.

O'BRIEN: All right. Let's get right to the business at hand, saving money. Let's -- for some reason you picked insurance as one of the leading things. People don't think about insurance as a place to save money. Tell us how you can save money there?

HARRIS: Well, one of the best things to do is to raise the deductible on your homeowner's insurance. If you raise the deductible from say $200 to $1,000, you can cut your premium by 25 percent.

O'BRIEN: Decent, yes.

HARRIS: And one of the reasons we chose insurance is like who likes to spend money on insurance.

O'BRIEN: Oh, really.

HARRIS: It's not exactly a fun splurge item.

O'BRIEN: Exactly, exactly. It's a tragedy you're dealing with or you're dead when you using it. So...

HARRIS: Right. O'BRIEN: All right. Let's talk about banking quickly. Checking accounts, a lot of confusion about free checking and where you should put your savings accounts. What's the best way to do that?

HARRIS: Well, you can either consolidate some of your accounts. If you keep high balances, then you get free checking. But if you -- but there's a disincentive to do that now, because the savings accounts are paying so little, it's only between 1 and 2 percent. So what you should do is look for free checking. And usually, that's available at a credit union, or a small community bank. And then, keep the rest of your money in money market fund, money market mutual fund or put it in three to five year certificates of deposit. You won't get a lot more, but you'll get a little more. So that will save things, and you know, save you a little money.

O'BRIEN: Or when in doubt, just go spend it. No, I guess you wouldn't recommend that, would you?

HARRIS: Well, yes, on things you like.

O'BRIEN: Yes.

HARRIS: But not on banking fees.

O'BRIEN: OK, there you go. Now another one that, you know, I pay the bill every month. I think this is a lot of money, but I don't think much about how to short circuit the process, drycleaning. Can you really save money there? Wear fewer clothes? I mean...

HARRIS: Yes. Yes, well, wear them more often. No, and use a lot of deodorant. But we didn't -- we actually didn't have that. No, actually, certain things you can actually wash in the washer, like cashmere. I was really surprised. You can wash a cashmere sweater in the washing machine and it doesn't hurt. And many things you can actually go without dry cleaning. You can wash in the machine, as long as they're kind of plain weaves or they are silks without say jacquard patterns, you can put them in the machine.

Now structured garments, like a suit, obviously, you wouldn't want to put in a washing machine. Those you have to dryclean, but you can cut back on by hanging up your clothes just like your mom told you, and kind of brushing off the lint and so when you get home each night.

O'BRIEN: And for me, quit wolfing my food down, because it always ends up on my suit. All right, let's talk about debt. Debt is a big one.

HARRIS: Maybe you should wear a bib. But anyway, yes.

O'BRIEN: Well, I do that frequently. Drop cloth, whatever it requires. Consumer debt, you know, here you talk about savings accounts. You're getting 1 or 2 percent. It's kind of a joke actually.

HARRIS: Right. O'BRIEN: And yet, credit card rates really haven't gone down. They're at 14, 17, sometimes 20 percent. Somebody's making a lot of money here. And how can you avoid, how can the consumer avoid becoming too good a customer for the credit card companies?

HARRIS: Well, that's true. Credit card company profits are up. And as a consumer, we're not too pleased with that. So what you should do is if you carry balances, you should call your credit card company and ask them to lower the interest rate. Chances are they will because it costs them $140 to acquire each new customer. And if you're a paying customer, you have a good credit record, there's no reason why they shouldn't just continue you. So that's what I do. I ask nicely. I wouldn't threaten, but I -- you could take your business elsewhere if they won't give you a break.

O'BRIEN: All right, what about shopping? You're out there in the retail environment. You know, this is where those impulse buys come in, and this is where you get in trouble. What's a person to do?

HARRIS: Well, unless something breaks down, you really should try to time your shopping by what's available on the -- you know, when things go on sale. And we polled our experts at "Consumer Reports," to find out what's on sale when. And it turns out that a lot of appliances like air conditioners and refrigerators go on sale in the spring. In the fall, you can get washers and dryers on sale. Vacuum cleaners in December. Not the greatest Christmas present, but...

O'BRIEN: Yes.

HARRIS: You can also get DVD players and bikes in the fall. So you have to -- and computers, apparently, go on sale like four times a year, when they make room for the new models, which seems to me to be everyday, but it's only four times a year.

O'BRIEN: Boy, you need a special calendar, just to keep track of all that. All right.

HARRIS: Absolutely.

O'BRIEN: Marliss is the finance editor, is that right?

HARRIS: Yes, that's right.

O'BRIEN: Finance editor for "Consumer Reports." And she's a faithful viewer. And now she's a program participant. We appreciate you being with us. We invite you to pick up a copy of "Consumer Reports," where you'll find more of those similar types of tips. You'll save a lot of money if you do. Thanks for being with us, Marliss.

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