Clark Howard: Insurance Tracking, Gas Pump Ripoffs, and Credit Card Advice

Usage-Based Auto Insurance

• 💡 Usage-based insurance programs can offer discounts but require a significant change in driving behavior to avoid becoming a punishment.
• ⚠️ Insurers are increasingly using data from apps and vehicles to track driving habits, sometimes without clear disclosure, potentially leading to higher premiums.
• 🚗 Modern cars, including EVs like Teslas, collect extensive data, including eye-tracking, which can impact driving automation if the driver is not attentive.
• ⚖️ Allstate faced a lawsuit in Texas for allegedly spying on drivers and surreptitiously raising rates without proper disclosure.

Navigating Auto Insurance Shopping

• 🚫 Many online auto insurance shopping services are not independent but are owned by insurers or act as lead generation services, resulting in excessive calls.
• 🛠️ Manually shopping for auto insurance by contacting different companies directly is recommended, despite the inconvenience.
• 💳 Freezing credit is generally not an issue when shopping for or renewing auto insurance, as insurers typically use soft inquiries that are permitted even with a credit freeze.
• 🌟 Amica is highlighted as a superior insurer in terms of service and claims handling, though potentially not the cheapest option.

Gas Station Surcharges and Credit Card Fees

• ⛽ A nationwide ripoff involves gas stations adding excessive surcharges for credit card payments, sometimes as much as $1 per gallon, far exceeding actual processing costs.
• 💰 While businesses should be allowed to pass on credit card processing fees, charging significantly more than the actual cost is considered a rip-off.
• 💳 The US is unique in having high merchant processing fees for credit cards, which banks pass on to businesses.
• 🍕 Some businesses, like a pizza place, may offer a lower price for cash payments, which can be perceived as a discount but may involve undeclared income.

Credit Card and Travel Advice

• ✈️ For airline-specific credit cards, it's generally advised to cancel them after receiving the sign-up bonus and the first year free, unless you fly that airline frequently.
• 💳 Fee-free credit cards that offer some perks can be a better alternative to high-annual-fee airline cards if you want to maintain credit activity without paying for unused benefits.
• 💡 A travel hack involves booking an outbound flight in business class and a return flight in economy, which can sometimes result in the entire round-trip being priced at the lower economy fare.
• 💰 The Fidelity 2% cash back credit card is recommended for its straightforward rewards that can be deposited into various Fidelity accounts, including retirement and 529 plans.