Clark is getting lots of calls from people looking for all kinds of deals on credit cards that offer rewards or cash back. At the same time, people are also calling about rising interest rates on credit cards. One recent caller’s rate had gone from 9.9 percent to 27.9 percent in a very short period of time. The credit card market has split into two major categories. The first serves the people who pay balances in full and are not considered a risk to companies. About 40 percent of people do this. Clark does this, and he earns a nice amount of cash back every year. The other group is charging at or near their limit. Credit card companies have a target on the backs of these people, and they plan to eat them up with fees. According to the Wall Street Journal, 85 percent of credit card issuers are now hitting consumers with punitive interest rates if they are a second late with their payment. Credit card companies are now even pulling reports on us to see if we are late with payments to other companies. In the mice type of their agreements, these companies say they can raise the interest rate on your card if you haven’t paid another merchant on time. It’s very important to pay off your balances in full each month and to limit your credit card charges.
Clark works out nearly every day of the week, and being fit is very important to him. But many people spend so much time at work that they don’t get a chance (or make the time) to work out. The good thing is that companies are starting to build fitness centers and incentive programs to get people to exercise. These programs cut down on absenteeism and medical costs for companies because employees are more productive and healthy. They also tend to be more productive at work, according to the Dallas Morning News. “Employer Wellness Programs” are the flavor of the month in corporate America, according to the paper. Some companies will even cover costs or pay you money if you’re working out. One company, for example, gives employees an extra $25 a month if they are working out. The Federal Reserve Bank of Dallas says it is saving thousands of dollars a year because of this program. So, let’s hope other companies catch on.
Gasoline prices are outrageously high these days, and Clark’s wife’s car eats more gas than almost any other on the road. We are pinched by what we are paying for in all forms of energy. Furthermore, we are not doing much to help the country become energy independent. We’ll get a big assist from corporate America, which is reducing the amount of energy they use. But oil will only make a small impact on the economy. Standard & Poor’s reports people are not as efficient as industry when it comes to using energy. The Federal Reserve will raise interest rates over the next year, but is likely to do so at a slow rate. This will counterbalance the harm we might suffer from the rising energy costs. Because oil prices fluctuate, we could end up with cheaper oil this year, but world demand for oil is rising in places like China, where the economy is growing. We must be attentive to fuel economy in this country. This includes making choices about how we heat our homes. We should go with higher efficiency heating models and buy cars that use less gasoline if we want to do our part.
There was tremendous amount of disarray in the last presidential election. A lot of that is caused by the fact that the fact that the popular vote does not always win the election. Electoral votes do, which is similar to a “winner-take-all” system. It simply doesn’t make sense any more. In fact, the message it sends to people who live in a red or blue state is that if they are a minority voter, their vote simply doesn’t count. We should use a system like Nebraska and Maine use, where the votes are, in part, apportioned based on the popular vote. Soon, Colorado will vote on whether the “winner take all system”, used in 48 states, would be replaced by proportional voting. Clark says that it makes sense to use a popular vote, which gets the nation back to a more realistic count and gets past the second-guessing and animosity created in most elections. Such a revision of the voting laws would actually be healing for the nation.
When Clark answers questions on the air, he often makes a recommendation but he also tells you how he feels about the issue at hand. One of those topics is “no money down” loans. In fact, in 2005 there will be more opportunity to buy a home without paying one cent down, and this is scary. There will be subsidies, such as “The American Dream Down Payment Act.” Income requirements will dictate who is eligible. But the problem is that homes are actually more expense than people imagine, especially if they put no money down. First of all, the foreclosure rate on a no money down purchase is incredibly high. Maybe one in three of the people who buy this way will enter into foreclosure. The alternative takes more time and effort, but it’s worth it. Save something over time, and put some money into the deal. Syndicated financial writer Kenneth Harney writes about something called “The Single File Mortgage.” People with little cash but very high credit ratings often get involved in these mortgages, and they are very expensive homes – up to $650k. If you have the higher score, you can get this kind of loan. The market place is trying to adjust to the risk involved in such loans. In the long run, however, one is almost always better off by saving the cash before getting into the mortgage.
How do you pay our bills? In the year 2004, electronic bill paying makes a lot of sense. In fact, roughly one-third of Americans now pay their bills, or some portion of their bills, online. And that the number is heading up. What is the problem with the old system of check writing? If it gets to the creditor late, you – the consumer - have no proof that the check was sent on time. You may get stuck with a late fee, or even a mark on your credit. Clark has done electronic bill paying since the 90’s. Sometimes, banks and companies make mistakes. But if you pay though online bill pay, there is an electronic paper trail. Then if there is a problem, the service will step up and help. Listeners say that this system has helped them when there is a problem. The payer is protected. Try it.
