810: How to Combat Poor College Money Habits - with Robin Saks Frankel, Lead Editor, Credit Cards, USA Today

Dr. Joe Sallustio: Welcome back everybody. It's your time to up on the EdUp Experience podcast where we make education your business. This is Dr. Joe Sallustio back with you for an 800 and something episode now as we pass four years of podcasting over 800 episodes, 365,000 downloads. And you continue to honor us with your support of this podcast, which is why we continue to do it.

I want to just let everybody know this episode should come out here in the next couple of weeks. You can find us recording live at Insights EDU. That's a conference hosted by Education Dynamics. It's in Phoenix, Arizona. It's on February 20th through 22nd of this year, 2024. Very, very excited. Of course, if you want to come and register, you can use code EDUP for $50 off your registration. Why would you not want to save $50? Saving money is an interesting topic, isn't it? Something that we all do on a daily basis. Some of us spend more, some of us save more. Some of us like to use a credit card and put things on a credit card, for example, and then pay them off bit by bit or right away. 

And that's something that - one of the most interesting things happened to me the other day. My kids got their report card. I'm going to bring in our guest in a minute. She didn't know that I was going to rant like this, but my kids got their report card and I decided I'm going to be like my dad. And I'm only like my dad a few times in life. But one of the things my dad did is he gave me $3 per A. And I thought that was massive, like every time I got an A, I would get three bucks. And as a young kid, that was a lot of money, right? Getting 20 bucks or whatever, $21. So I said, I'm going to do the same thing my dad did. I'm going to give my kids three bucks for every A.

That was about 10 days ago and I literally don't have cash. I don't have cash. I don't even remember how to get cash. I have like $2 in my wallet at all times. I told my wife, I'm like, go get some cash. She's like, I gotta go over here. I gotta get cash. Gotta go to the bank. And the next thing you know, 10 days later, my kids are like, where's my money? Where's my money? But it does show you the state of things today, which is why this guest has a lot to say. And I'm gonna bring her in now. You'll get the whole transition thing.

I want to introduce our guest ladies and gentlemen. Her name is Robin Saks Frankel and she is the lead editor for credit cards at USA Today. Robin, welcome to the mic.

Robin Saks Frankel: Hi, thanks for having me.

Dr. Joe Sallustio: Do you carry cash Robin?

Robin Saks Frankel: I almost never carry cash, much to my children's chagrin. So your story is very relatable.

Dr. Joe Sallustio: Being the lead editor for credit cards at USA Today, obviously you're doing a lot of writing about personal finance in general. I would call you a personal finance expert. One of the interesting things about cash as we have this conversation is that people don't take it as much as they used to. In fact, my father-in-law, Italian guy, he's got his cash, you know, and he goes into some places and he tries to pay with cash and they go, "No, no, no, we don't take cash anymore. Only use a credit card." Is that true? Are businesses just refusing cash these days?

Robin Saks Frankel: I mean, there's been a little bit of controversy about that. I know in Manhattan, that was a big issue because not accepting cash tends to penalize the underbanked. That is people who don't have bank accounts for whatever reason. Maybe they came from countries where they didn't trust the banking system. Maybe they just haven't established credit. Maybe they just don't trust banks for whatever reason. Maybe they don't feel comfortable with it. Maybe they don't have enough money to even start a bank account. So there's all kinds of reasons why people would not have access to other forms of payment. So that can be a little bit controversial. 

In general though, I found that in my own life, mostly because I'm an avid rewards points and miles collector, I don't really carry a lot of cash. Even my kids, I make them carry $20 each in their phone case. I have teen boys just for whatever emergency. I don't know what that cash emergency might be, but whatever. But they almost always pay with Apple Pay. Everywhere they go, everything they do. We have them as an authorized user and we have that loaded into their Apple Pay.

Dr. Joe Sallustio: Do you think that's a disadvantage for understanding how to maintain your own personal finances? Like it's so easy, right? Just tap, tap, tap, tap, tap. It's like being on a cruise ship where everything is swipeable. And next thing you know, you're in it $3,000. Are our kids being trained properly in personal finance?

Robin Saks Frankel: Well, actually, the transaction process can be a disadvantage, not because even adults have trouble with it when you don't have something physical to see it dwindling in your hand. You give someone your 20 and you only get five and change back. You're missing that visceral feeling when you just kind of tap your phone. And to be honest, my kids, when they tap their phone, that bill goes to me. I mean, they're not old enough to have their own credit card. They're under 18, so they're authorized users. I do make them, my husband and I do make them pay us back quote unquote for certain things. And then they suddenly don't want to spend that money anymore. Surprise.

Dr. Joe Sallustio: Yeah. So it's pretty interesting, you know, when it comes to something like concert tickets, they would go to every concert that comes to town and concert tickets are $200, $300 sometimes.

Robin Saks Frankel: Yeah. I mean, right. And that's for miserable seats. So I have said to them, you know, my husband and I have said to them, okay, you already went and saw this person in the fall. He's coming back in the spring. If you want to go, you have to pay with your own money. And suddenly they're like, "Oh." But when it's tapping my credit card, it's like money has no object.

Dr. Joe Sallustio: It's interesting, right? Even adults, you're right. It is easy to tap. It's easy to swipe. When you have X of something, you don't want to give it away. It's a whole lot easier to understand. And, you know, we're all after bettering our lives. And one of the ways to better your lives is to make more money. Right. And so one of the reasons you're here today is because you put out a report called "Industries where workers feel the most underpaid."

It was published on January 1st. Really interesting report. And I would like you to just go over high level. What was it? Why did you write this report? What was the genesis for it? And what did it tell us that we should know?

Robin Saks Frankel: Sure. So the bottom line with this report was just trying to find out, you know, a lot of people say they're frustrated with what they get paid for their jobs. Everybody has work frustrations. But it didn't necessarily match up - the people who are the most frustrated weren't the people who are the least frustrated with their pay were not necessarily the least happy with their jobs. And education was one of the most striking examples of that. That was, I believe, the industry that had some of the highest job satisfaction, but some of the most frustration with the amount of pay they were receiving.

Dr. Joe Sallustio: Define education for us. Would it be K through 12, higher ed?

Robin Saks Frankel: It was anybody who identified as working in education. I don't believe that we got that granular in terms of whether it was K through 12 versus higher ed versus some other form of education, you know, people who taught classes on the weekend or something. So it kind of encompassed anyone who considered themselves an educator.

Dr. Joe Sallustio: You know, it's pretty common, especially in K-12, that teachers are one of the most underpaid, underappreciated jobs in the world, in the land, right? And we depend as adults who have kids on our teachers to basically help craft the minds of our students financially or otherwise, learning wise, and teachers don't get paid. Really, they don't get paid very much. It's common. You know, I have to tell you, I got a new appreciation for how underpaid teachers are and how hard their jobs are.

Robin Saks Frankel: I taught a personal finance class where one of my kids goes to school. It was a high school level personal finance class. I taught it this past fall and the fall before. And it's a little bit like herding cats. And it's not that these were bad kids. It's just, it's very hard to sit and focus all day. It's hard for adults to do that, right? And we don't have the same social stuff going on that kids in high school do. And it was, I found it really challenging. And again, I was teaching a group of fairly well-behaved kids who opted into this, but I can't even imagine what it's like to do it all day for subjects that, you know, kids have to take. They don't necessarily say, "I want to do math" or "I want to do English" or "I want to do science" or "I want to learn language." They're required to, and I still found it very, very challenging. 

And even if every kid had been a perfect angel, just the time commitment, you know, making up the lesson plans and grading the tests and the amount of time you have to take to calm kids down and get them to focus. I have found in my own kids and just their friends, you know, I think they're great kids, but the attention spans today are so different from when I was young because they're all swiping, swipe, you know, nothing gets focused on for very long. And obviously that bleeds into other areas of life. So teachers at every level...

Dr. Joe Sallustio: I remember when my mom took me to a bank. I don't know, 14, 15, whatever age, I was able to write a check. And I was so nervous to go into the bank and write a check. And she's like, you know, come over to this table. I felt like the government was putting pressure on me as I entered this bank, right? And I'm like, I got to sign this. You know, when you think about, I think back to that and go the learning experience of walking into a bank and writing a check or taking out money or putting money in.

We don't need to do that anymore to back to your point. We skip - I talk about this all the time on the podcast - we skip the intro on Netflix. We skip it because we don't want to watch an intro anymore. I have a nine-year-old and a six-year-old who literally have meltdowns when they watch Hulu because there are ads built into the show and they go "What is this garbage?" You know, and they freak out because Harry Potter 6 is interrupted by a L'Oreal ad. So everything is faster and it doesn't - we don't have to go anywhere to do anything.

What is that doing to our credit card and personal finance situations as a population? And just from your experience in general, are we just more in debt and don't know how to get out of it? Or are we smarter or less smart financially?

Robin Saks Frankel: Well, we're definitely more in debt. I don't know how much that has to do with the attention span or not, but I believe current levels of credit card debt are something like one trillion. I mean, the highest it's ever been.

I don't know that that necessarily has to do with us being smarter or dumber about personal finance. It's just a function of a couple of things. One, people just have more stuff. Everybody has a smartphone now. You have to have some level of smartphone, but some places don't even ask you for a home phone. I don't have a home phone. We all have cell phones, right? So, but there's a big difference in price between just having one landline for your house and then if you're a family of four, having sophisticated smartphones. And you have to have high-speed internet for the house and everybody has to have a laptop for school or else they fall behind. And so we just need more stuff. 

And with that also, everyone has their eyes glued to social media. We're seeing people who have more stuff. We're seeing more aspirational lives and that's becoming the consumerism that we see is becoming more normal. So it causes us to feel like we need more to be more and that gets very expensive.

The other thing that I think is possibly, I mean, this is just me speculating, but I'm finding it that when I do any online shopping whatsoever, the ability to just pay in two clicks really removes some of the friction point where you stop for a minute and say, do I really need to buy this when it comes to disposable income items? Even if you don't have your credit card handy, you can just click on something, you know, can click on... Yeah, you just log in and like, I mean, you really...

Dr. Joe Sallustio: A lot of this stuff, the pay-in-four stuff, it's all designed to remove the friction point where you might say, wait, do I really need this? And to just have you click because clicking in two clicks is a lot easier than walking into a store, trying something on, pulling out your credit card, waiting for it to ring you up. You know, that gives you time to think, and maybe I don't need this online.

Robin Saks Frankel: Yeah.

Dr. Joe Sallustio: Yeah. You know, like that one time you got in line and there are five people ahead of you and you started going, am I going to wait here for this thing? Like, no, forget it. I'll get it next time.

Robin Saks Frankel: I'll get it next time. Well, you got $58 more in your pocket and maybe you do something else with that, but you're right. It makes it really easy for us to spend more money.

Dr. Joe Sallustio: So, you know, I think that goes for all types of industries, but I was reading back to your report just to go backwards a little bit, but this stat you said at the beginning, but I want to drive it home. Industries where employees are most satisfied with their organizations. So most satisfied with their organizations.

A prime example of where employees are satisfied with their organization, but feel they are underpaid is education, which includes roughly 60% more mentions of poor pay than average, but also boasts the highest overall workplace ratings. What's a takeaway? Like, what do you think about that when you guys were writing this? What was the takeaway?

Robin Saks Frankel: I don't think it's a surprise to most that people generally don't go into teaching for the salaries, right? It's not like people who become investment bankers or something that's extremely pay focused, right? Most people go into education because they want to help people. They want people to learn. They want to feel like they're part of something bigger than themselves. And so when you do that, you're not necessarily expecting to make zillions from it, right? So I think just being in that field, it's similar to doing, to me, honestly, it's similar to almost doing social services work. You're doing something that's about a greater good. You're trying to help children learn and get smarter and move on to the next level in life, whatever grade that may be or whatever stage that may be. And that's something I think that if you enjoy what you're doing, you're getting a lot of intrinsic satisfaction, which can help mitigate perhaps that you're not, maybe you're not getting a six-figure paycheck, you know, or you're not close to half of that. I mean, I don't know, pay scales are so different all over the country when it comes to education. But, you know, I think that's where that dichotomy comes in is that there's a lot of intrinsic satisfaction from the job, even if the paychecks don't reflect the importance of the job.

Dr. Joe Sallustio: Yeah, but it's, you know, the interesting part about that is it also kind of says, I know I'm underpaid or I want to say I'm underpaid, but I love my job so stinking much. I stay in it. I stay in it because I love it so much. And there's like a diminishing return or a sliding scale somewhere in there where you go, you know, because you see teachers sometimes 19, 20 years. And we've talked to many, many, many institutions on this podcast that offer teaching programs for higher ed, aspiring higher ed professionals and for aspiring teachers.

And they just are going to do it. They're going to do it no matter what, because they want to teach. And if they make $35,000 a year for the next 19 years, that's OK, because they love it so much. But that doesn't help that profession, right, when wages don't go up. It's a tough spot to be in where you love your job so much and you don't make money doing it. But then you look at tech and the sciences, where people are getting really high paid jobs where job satisfaction may not be there as much. Is that the trade off that we make?

Robin Saks Frankel: I think so. I mean, you know, when I think of people who all they want to do is make art, whether that's acting or painting or singing, and they'd rather do that than any other kind of job. And there is a massive risk that they're not going to have success with that. You know, I mean, a teacher obviously offers way more stability than a struggling artist might find, but you know, the burnout rate can also be really high at some of these high pressure, high tech or top level finance jobs. I mean, I don't know. I don't know every investment banker or venture fund capital person in the world, but they don't get summers off and they don't, you know, I'm not saying a teaching job is always nine to five, but they can, you know, the expectation sometimes you hear people sleeping under their desks or working two hours to finish coding a certain project. And you know, with high pay tends to come extremely high pressure. And that's not to say teachers don't have pressure. It's just a different kind of pressure.

Dr. Joe Sallustio: What do you advise families, parents, higher education administrators about credit cards in general. There used to be a time when credit card companies would come onto a campus. I know this because I was one of those people that filled out a Visa and $11,000 later through my four years of college, I think I paid that off when I was 28, finally. That doesn't happen as often anymore because I think the rules around it are different.

Robin Saks Frankel: Yeah, that shouldn't happen at all anymore. Actually, there's been legislation that's since been passed since you were in college where credit card companies are not allowed to market on campuses. You know, go sign up today, you get a free t-shirt or something like that. Because what was happening with so many college students - until somebody teaches you something, you're not just born knowing about credit or bank accounts or anything like that. You have to be taught. Kids were just signing up for credit cards and then not understanding about compounding interest and how high credit card interest rates could be and debt is getting out of control. So legislation was passed and they're not allowed to market on campuses in that way anymore.

Dr. Joe Sallustio: Should you ever think that, I mean, you have kids, will they have their own credit card when they go away to college? Is it controlled? Do you think parents should control it? You know, cause you see college debt is like a real deal, right? There's tons of us in debt. I'm going to ask you about reward cards in a minute, but you've got so much college debt and a lot of that college debt comes in two forms. It comes in a form of financial aid and it comes in a form of I just have to eat. I have to do this. I have to do that. And then you add all those things together and you've got a, you know, something that's hard to overcome.

Robin Saks Frankel: Sure. So let me take a couple of steps back with it. Yes, my kids will have credit cards. Right now, I have them both as authorized users on credit cards, which I highly recommend to anybody, even if you just add their name to your credit card and then just stick it in a drawer, because then what happens is your kids kind of tag on and piggyback to your credit score, unless you have bad credit and then you're not helping them by doing that. Many credit card companies like American Express, I can't name them off the top of my head, but most credit card companies will allow you to add your kid as an authorized user at the age of 13. So as soon as my kids turn 13, I just added them onto an Amex. And that's actually what I have loaded into their Apple Pay.

So they have some experience using it and also to show some credit activity. So what'll happen is when my oldest turns 18, he'll have whatever my credit score is at the time, he should have that like launch with that as his score. I mean, more or less, yeah. I mean, there's some other factors there. It might not be quite as good as mine only because I'll have more years of having credit, which is a factor in your credit score, but he should have good credit. I hope I have good credit when he graduates.

Dr. Joe Sallustio: So you're the lead editor for credit cards. We hope you do too. Yeah. Yeah. Right. Exactly.

Robin Saks Frankel: At least I know what I'm doing wrong if I do something wrong. So when he graduates, I'll get him a credit card for sure. And what I would recommend to folks who are very concerned about their families and their children's ability to pay for everything through college. I mean, one thing that you can do in addition to student loans is get a 0% APR credit card, one that has a 0% APR on purchases that can help you with some of the upfront costs like buying a lot of books at the beginning of the school year or buying the basics to furnish a dorm room if you're living on campus. 

But again, my kids probably hear me talking about it more than most people's parents. I don't think most people's parents are shoving it in their faces about credit cards. I make sure my kids understand the technology. I'm tapping to pay at the supermarket and I'm like, this is why there's not mag strips anymore. The mag strips kind of, I mean, I talk to them about it, not because I want to bore them to death or have them think I'm any less cool than they already do, but because they should be empowered. They should know that it's a thing. And also identity theft is real, right? Identity theft. So you've got to know how things work, how to protect yourself.

Dr. Joe Sallustio: What happens if I - you don't have to go very far around a network of people and say, have you ever had your identity stolen? Somebody raises their hand. It's very common, unfortunately. But I want to just kind of close, close this with reward cards. You know, no matter what your spending is, student, adult, or otherwise, you have the opportunity for rewards cards. Why is that such an important concept to take advantage of?

Robin Saks Frankel: Well, reward cards are an amazing thing. It's like money for free, but only, and this is, I wish I could say only in capital letters, right? It's only valuable if you're paying your credit card in full and on time every month because if you're not, interest rates on credit cards are always double digits. I think the average interest rate on credit cards right now, it's something like maybe 19, 20%. And that's pretty high, right? But the most you're ever gonna earn on a rewards card could be 5% back, 4%, 3%. So you're never gonna earn more in rewards to overcome the fact that you're carrying a balance. 

Now, that being said, if you're a student and your credit card needs are really small, maybe you're just using it at a restaurant so you can tap and go or grab a coffee or whatever, earning rewards back on your spending is like getting a coupon, right? So every time you buy a coffee, if you spend $20 on your credit card and you have a credit card that rewards you with 5% cash back every quarter on dining, you're getting 5% back on that $20. It's not nothing, but it's just a good way to start thinking about how credit cards can be a tool to improve your life. 

Ultimately, the most important thing that you should know about credit cards when you're young and in college is that they're one of the most important tools for building credit and good credit is super important, not so you can get more credit cards, but so you get the most favorable rates on all of your loans, everything from student loans to a mortgage someday, to your auto loans, if you need a personal loan. Unfortunately, without good credit, you get even more penalized for your poor financial decisions. It's kind of, it's not a system that's great, but it's the only system we have.

Dr. Joe Sallustio: That's a fact, that's a fact. I appreciate everything you said because I think that, you know, one of the lost areas that we have in higher ed, we get student loans, we understand Title IV financial aid and subsidized and unsubsidized, or at least we do as administrators. But what we don't always think about is the personal financial burden that students can take on - underprivileged students, students from diverse backgrounds, students, you know, I mean, and you end up building this debt behind you to operate and it's very hard to build out. It's very hard to catch up on credit card debt. It's very, very hard. People try their whole lives to do it and sometimes unsuccessfully because you have to know the mathematics of building interest and amortization schedules, which is like a very confusing part of this and...

What's your general advice for, you know, to close the episode of maintaining credit cards, personal finance, what else do you want to say about your role at USA Today?

Robin Saks Frankel: Well, that's a big question. That's three questions actually, all in...

Dr. Joe Sallustio: Yeah, lots of facets.

Robin Saks Frankel: So what I will say is when someone is struggling with high interest credit card debt, it can be super overwhelming and scary. You know, my recommendation is if you don't have horrible credit, look for a balance transfer card. That's a card that offers you a 0% APR when you transfer a balance from another card or another type of loan to that new card and you pay 0% interest for a set period of time. It could be anywhere from six months to almost two years. And during that time, it allows you to tackle that debt without also having to pay those interest charges. So it helps you pay off debt faster.

Part of the catch-22 with balance transfer cards is that you need good credit in order to qualify for one. And if you have a lot of debt, a lot of unmanageable debt, you might not have good credit. The best thing you can do is stop using those cards. Stop, just stop. Put them in a drawer, pretend they don't exist. Yeah, pay for everything with cash and just do your best. I mean, if it really gets bad, there are nonprofit credit counseling services, but do not believe those ads you hear on the radio or TV that tell you how to settle your debt. 99.99% of them are garbage and they'll get you into deeper trouble. 

By the way, we talked about kids and we talked about college students, but I guarantee there is a number of adults listening to the podcast that are in debt, trying to climb out of debt, probably have student loans they're still paying off or put some, you know, put their backyard fence on their credit card $20,000 ago and are still paying it off and can't climb out. This is just good general advice for taking care of your personal financial situation. And, you know, we always talk about credit score, everything we do in life, there's - you're going to pull your credit, you're gonna pull it for a mortgage, you're gonna pull it for another credit card. So maintaining that credit is so important. Any advice for us on maintaining credit or where to go, where to look, how to do it?

Robin Saks Frankel: Sure. So you're entitled to a free credit report every week from each of the three major consumer credit reporting agencies. You can go to annualcreditreport.com. I know it says annualcreditreport.com, but since COVID, the credit bureaus now allow you to pull it weekly. I highly recommend checking your credit report from any of those agencies and making sure that there's no errors, because there could be an error that's dragging on your score. It could be someone with a name similar to yours, but with a different middle initial that's showing up in your report. It could be a debt that you've cleared that is still in your report. 

So making sure that your credit report is accurate is amazing, but almost every bank, if you have their mobile app or you log in online, most of them come with some kind of free credit score checker. So just checking it, getting a baseline idea where you are. And a lot of these bank apps and websites, they'll have tools that'll say, let us help you. Let's find you a plan to improve your credit. Other things that you can do, especially when you're young, Experian has a program called Experian Boost that you can tie your utility payments and cell phone payments to that. So those on-time payments can help count towards your credit score and give you a boost, you know, for people with thin credit profiles. So maybe just looking to pad them a little bit with some of their on-time payment behavior.

Dr. Joe Sallustio: Thank you for that tip. I actually still thought annual credit reports were annual. Was that a COVID deal? What happened with that?

Robin Saks Frankel: So during COVID, because there was so much pausing of payments on things and companies had to, I guess, part of the deal was they had - in order to get government money, they had to not penalize people's credit reports. So they changed it to weekly and then they've just kept it as weekly. So now their annual credit report eventually I suppose should be redirected to Weekly Credit Report.

Dr. Joe Sallustio: Exactly. I mean, a lot of people don't know it and it's confusing. And I don't think it's as highly publicized as it could be, but...

Robin Saks Frankel: Yes, absolutely. At each one, there's three major consumer credit reporting agencies and each one will allow you to check your report for free every week should you wish to do so.

Dr. Joe Sallustio: There's the tip. That's the edit right there. That's the tip. I love it. Thank you. What do you cover next, Robin? What's the next thing you're working on that you want to divulge here live on the EdUp Experience podcast?

Robin Saks Frankel: I mean, we do a lot of exciting things. We're going to be working on a tipping statistics survey. That should be pretty exciting. We always have a lot of great content at USA Today Blueprint.

Dr. Joe Sallustio: Where should we find you? USA Today Blueprint? Is there a particular website we can find you?

Robin Saks Frankel: Yeah, usatoday.com under the money label Blueprint. It's all things personal finance and it's all fantastic.

Dr. Joe Sallustio: Ladies and gentlemen, there is our guest today. She's your guest today. Her name is Robin Saks Frankel. She is the lead editor for credit cards at USA Today. Robin, thanks for being a part of this podcast. We've very much enjoyed. I personally enjoyed what you had to say about finance and credit cards. It is something all of us fight, isn't it?

Robin Saks Frankel: Yes. And I really appreciate the opportunity to speak with you and speak with your listeners.

Dr. Joe Sallustio: Ladies and gentlemen, you've just EdUpped.