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CNN Saturday Morning News
Clark Howard Gives Personal Finance Tips
Aired May 04, 2002 - 08:19 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 CORRESPONDENT: Last week faithful viewers know I complained heartily about the fact that we had asked repeatedly over the years to get Clark Howard on to talk about consumer tips and how he had always said no. And then we finally get him on. He had such a good time he's back for more.
Clark Howard joining us now from Dallas. And Clark, is it safe to say you're now our official consumer reporter here on CNN SATURDAY MORNING?
CLARK HOWARD, AUTHOR, "GET CLARK SMART": I guess so. But if I have to work this early every week, I just don't know that I can hang with this. This is way early.
O'BRIEN: All right, it's too early -- well, it is, you know, an hour back in Dallas, too. We apologize for that.
C. HOWARD: OK.
O'BRIEN: But just stay on East Coast time.
Anyway, good to see you.
How is the book tour going?
C. HOWARD: It's going fantastically. I've made two best seller lists so far. So I'm getting there. I was number nine in the "Wall Street Journal" best seller list yesterday and I think I'm in the same position in the "USA Today" best seller list.
O'BRIEN: I'm curious, as you travel around and you meet people and they talk to you what is, is there one question which comes up time and again or a group of questions which tend to lead the list?
C. HOWARD: Well, there are the oldies but goodies that have been with me all through the years, and that's questions about people's homes and cars. And I did a listener event last night in Dallas where the whole thing was dominated by questions about houses and cars.
But the thing that's been different over the last year is the load of debt people are carrying. I'm getting so many more questions from people who are carrying enormous credit card debt or personal finance debt or even home equity line of credit debt. And maybe in a two-income household one of the two will lose their job or one of them has their hours cut back and they can't seem to make it work.
O'BRIEN: Well, Clark, let me ask you this question, because I, you know, we all get these things in the mail, you know, clean up, consolidate your credit card debt.
C. HOWARD: Right.
O'BRIEN: Get a home equity line. A hundred and 10 percent of the value of your house. That makes me nervous right there. But is it a wise idea generally, I mean when you look at the credit card interest rates, they're high. You're shaking your head.
C. HOWARD: Right.
O'BRIEN: But is it ever a good idea, because, after all, the home equity interest is deductible and it is usually less, right?
C. HOWARD: It is much less interest and also it is deductible. Credit card debt used to be deductible. It's not anymore unless it's for a business purpose. But here's the problem. Let's say you have this credit card debt. You transfer the credit card debt to debt against your home. What happens if you can't make the payment? You lose your home. I mean you're taking a debt that's just against your signature and you're turning it into a debt that could make you lose your home and that's just too risky.
O'BRIEN: I see.
C. HOWARD: So that's why I discourage people from taking the debt that they have against visa and MasterCard, American Express, Discover and making a debt against your home, because then you'll discover if you can't pay, you've got no place to stay.
O'BRIEN: All right, let's get a phone call on. Margie is in New York. Margie, did you call collect and charge it to Clark?
MARGIE: No, I -- you want me to call back again?
O'BRIEN: No.
C. HOWARD: I think you should call back and I have this deal where you can call me for about three cents a minute.
O'BRIEN: Three cents a minute? That's good. That's really good. We want to find out more about that in a second. But first, Margie, let's do your question.
MARGIE: OK, I'd like to know where landlords can get credit reports on potential tenants. We have two houses that we rent and sometimes we get stuck with not very honest tenants.
C. HOWARD: Well, I must tell you, I've been a landlord for 19 years and in 19 years I've only been stuck once by a tenant. So I've had a pretty good batting average and I have not pulled credit reports. But if you want to, it is so easy now for a landlord, even of just a property or two, to pull credit reports. It'll shock you. The first thing you can do is if you're Internet active, go to a site like landlord.com. You'll see lots of ads for people that will sell you credit reports on your would be tenants. You have to have the tenant in the application you have him fill out disclose, you have to disclose to them and they have to agree that you're going to pull their credit report. And you can charge them for it as part of the application fee.
Or you can turn to the yellow pages and if you go under credit reporting agencies, you'll see ad after ad for companies that will sell credit reports to landlords. Now, as a landlord, how many properties do you have?
O'BRIEN: Is she still with us? I think she said she had two houses.
C. HOWARD: Two houses.
O'BRIEN: Yes.
C. HOWARD: You'll pay more for those credit reports than you would if you owned an entire complex. You know, volume gets you a lower price. But it still won't be anything astronomical and you'll have the opportunity to check people out.
O'BRIEN: Now, let me ask you this, Clark, you still have to use a middleman there, though. You can't just go to a Web site, put in the information, indicate that a signature has been received from the prospective tenant and get the information?
C. HOWARD: No, you can't. You know, even if you do access via Web site, it's still through a third party. There are the three major credit bureaus, Equifax, Trans Union and Experion. And then there are the servicing credit bureaus. And you generally is, a landlord would deal with one of the servicing bureaus.
O'BRIEN: All right, we have an e-mail question. I'm going to give it to you now, Clark, because you might have to hit the Web to get the answer to this one while we're in the break.
C. HOWARD: OK.
O'BRIEN: "Dear Miles, please ask your guest on whether he can shed any light on the new Treasury banks that have already been established through bank consolidations and the new gold backed currency that it will be using?" When will this happen? I have no idea what this person is talking about. Do you know what this is about, a gold backed currency?
C. HOWARD: I am completely clueless.
O'BRIEN: All right, well, that's from Willie Blockson, retired U.S. Air Force Master Sergeant, or Technical Sergeant.
Willie, we're going to have to get back to you on that one some other time. In the meantime, call us, 404-221-1855. Call us collect. We will accept the charges and no, we won't stick it to Clark. CNN can afford the call. Stay with us for more.
(COMMERCIAL BREAK)
O'BRIEN: All right, we're back with Clark Howard. We officially, we stumped Clark Howard. Of course, the person stumped all of us here in the newsroom about this gold standard.
Anyway, hey, I wanted to ask you about, because you sort of mentioned it as an aside, three cents a minute. How do you do that?
C. HOWARD: Oh, it's easy. There are lots of vendors now that are between three cents and four and a half cents minute for long distance. And I don't want you paying any monthly feel for long distance at all. And there are companies where you can set up for dial one from your home at four to four and a half to five cents a minute, no monthly fee and no monthly minimum.
But calling cards are available at 2.9 and 3.4. You know, the warehouse clubs, Sam's and Costco, both are selling prepaid minutes at about 3.4 cents per minute with no set up charge per call. You just buy a prepaid card, usually in an amount of 20 bucks, and you'll be on the phone for about the rest of your life before you need another $20 card.
O'BRIEN: Well, yes, but Clark, aren't you on the phone for the rest of your life dialing numbers after you get one of these cards?
C. HOWARD: OK. Yes, well, all right, let's talk about the prepaid card. What you do, how many of us don't have a phone that has speed dial in it?
O'BRIEN: Well, you're right. Speed dial...
C. HOWARD: You program in...
O'BRIEN: Speed dial is something that has come along. Welcome to the '80s.
C. HOWARD: So you program in the access number and then you program in the access number and then you program in your secret code. And so you add about two seconds to placing a call, but you're only going to pay 3.4 cents a minute. Or, there is a company called Zone L.D. that is a long distance carrier where you sign up with them and you pay four and a half cents a minute to any state except for five that you get to pick. And the five states you pick are only four cents a minute and it's dial one service from your home. And they send you, the way you get your bill is you get it as an e-mail. And here's what's really neat. Think about this. Not only are you paying only four, four and a half cents a minute, but you bill to a credit card. So if you have a credit card that you earn frequent flier miles or cash back, you're getting that as a bonus benefit, as well.
O'BRIEN: All right, let's move on to your other favorite subject, which, of course, are air fares. A specific question here, but I want to ask a general follow to it. Rick in St. Louis said, "How can I get the cheapest possible round trip air fare to Bristol, U.K.? I think 1,200 bucks is unfair." IT sure is, Rick.
C. HOWARD: Twelve hundred dollars?
O'BRIEN: Twelve hundred, for god's sakes. Rick, you can do better than that. What is the general, I mean what's your best advice on getting the cheap deals on air fares?
C. HOWARD: OK, obviously 1,200 bucks, he's got to be going in July or August, because those are the two most expensive months of the year.
O'BRIEN: Presumably, yes. Yes.
C. HOWARD: The easiest way to save money in the case of St. Louis, that's a big Southwest Airlines city. You can take them from St. Louis to Baltimore and out of Baltimore, Iceland Air flies. And they have fantastic deals to Europe for summer with Great Britain at $499 round trip from Baltimore in the peak of the peak season. So he might have maybe $150 to $200 to go from St. Louis to Baltimore. Once he's there, 500 bucks gets you across.
Now, you have to sign up to have access to the special fares on Iceland Air and you sign up at icelandair.com for what's called the lucky fares. And every week or every other week they send you an e- mail of the lucky fares of the week. And this week the lucky fares to Great Britain for peak season? Four hundred ninety-nine bucks.
O'BRIEN: Not bad. Of course...
C. HOWARD: And, oh, and you get a free stopover in Reykjavik, Iceland.
O'BRIEN: Oh, ho. Yes.
C. HOWARD: Think about that. You can go to, you know, they have those natural baths there?
O'BRIEN: Actually, it's a beautiful place, I'm told. I haven't been there, but I hear it's beautiful. Of course, don't worry about the fact that the plane is pulled by flying reindeer. Not an issue.
C. HOWARD: All brand new planes with Iceland Air. They used to fly planes that were really from the ice age. But now they're flying modern equipment there.
O'BRIEN: All right, now, Clark, you've been on a book tour for how long now?
C. HOWARD: Oh, for weeks. I've got several more to go.
O'BRIEN: Well, too much travel and you, there's some special guest on the line right now who wants to talk to you and just reach out and say hello. Rebecca, are you there? REBECCA C. HOWARD: Uh-huh.
O'BRIEN: You miss your dad?
R. HOWARD: Yes, I do.
O'BRIEN: Yes, now, let me ask you this. You dialed us locally so it's not costing you anything, right?
R. HOWARD: Exactly.
O'BRIEN: OK, Clark, it's a free call. Do you guys want to...
C. HOWARD: Yes?
O'BRIEN: Do you guys want to catch up for just a minute, because I know it's hard being on the road.
C. HOWARD: Now, see, Rebecca, you said you needed a picture of me to remember what I look like because I'm gone for a month or so...
R. HOWARD: Uh-huh?
C. HOWARD: How's this? This is a live picture. This is like a video conference call.
R. HOWARD: Yes, this is pretty good.
O'BRIEN: Hey, Rebecca, I've got to ask you, are you as cheap as your dad?
R. HOWARD: No.
O'BRIEN: You're not?
R. HOWARD: No.
O'BRIEN: Have I stumbled into a domestic issue here?
R. HOWARD: Well...
C. HOWARD: Rebecca, tell our don't ask don't tell rule.
R. HOWARD: Yes, when he's in the room I can't say anything.
O'BRIEN: Well, he's not in the room. He's in Dallas. Go ahead.
R. HOWARD: He can hear me.
O'BRIEN: All right, Rebecca. We appreciate you dialing in saying hi to dad and dad misses you, Rebecca. Rebecca misses dad.
All right, thanks, Clark, for coming back twice.
C. HOWARD: Sure.
O'BRIEN: We'll see you next week?
C. HOWARD: All right. Next week.
O'BRIEN: All right.
C. HOWARD: What city will I be in next week?
O'BRIEN: If it's Saturday, it must be Peoria. Who knows?
C. HOWARD: Maybe so.
O'BRIEN: All right, safe travels. Good luck with the book.
C. HOWARD: Thank you.
O'BRIEN: The book, once again, is "Get Clark Smart." It's now a best seller on two lists we know of, one of them, the "Wall Street Journal." That's an actual bona fide publication there.
C. HOWARD: I'll take that.
O'BRIEN: Clark Howard, thanks a lot for joining us. We appreciate it.
C. HOWARD: Thanks. Sure.
O'BRIEN: And thank you, Rebecca.
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