Financial Freedom For All

Planning A Move To The U S Understand U S Tax Residency Rules

If you are contemplating a move to the United States (U.S.), note that you should consider tax implications well ahead of your actual move date. Your tax liability in the U.S. is dependent on your citizenship or residency status in the U.S.:
  • U.S. citizens and resident aliens are taxed on their worldwide income
  • Non-resident aliens are only taxed on their U.S. source income

This may present opportunities to structure your financial affairs before being subject to the full U.S. tax system.

US Tax residency

How U.S. Tax Residency is Determined

From the standpoint of the U.S., you are either a U.S. citizen or an alien. If you are not a U.S. citizen, you are considered a resident alien or a non-resident alien. Aliens may be considered resident aliens under the following conditions:

  • Green Card Holder – lawful permanent resident
  • Substantial presence test
  • Elections to be treated as a U.S. tax resident

An income tax treaty can override U.S. tax residency.

Each of these categories of U.S. tax residents are discussed below in addition to general U.S. state tax residency rules and U.S. estate and gift tax residency rules.

U.S. Citizenship

If you are a U.S. citizen, you are taxed on your worldwide income, no matter where in the world you may reside, and no matter where your income may be derived. Generally, you are a citizen of the U.S. if you were born in the U.S. or born to a U.S. citizen parent who lived in the U.S. for a certain number of years after age 14. This can sometimes create issues for Canadians born in the U.S. or to U.S. parents; these people may be accidental Americans.

U.S. citizenship can be renounced, but this can create issues if you have a high net worth or income, or have later plans to work in / travel to the U.S.

Green Card Holders

The U.S. Citizenship and Immigration Services (USCIS) may issue a (lawful) permanent resident card (LPR) allowing you to reside and work permanently in the U.S. as an immigrant. You would then be referred to as a Green Card holder or LPR. The tax treatment of Green Card holders is like that of U.S. citizens: you’re taxed on worldwide income no matter where you may reside or earn that income. However, your Green Card may be revoked if you abandon the intention to reside permanently in the U.S.

A Green Card may also be surrendered/abandoned.  In the case where a Green Card has expired but has not been formally revoked by USCIS (via the filing of an I-407 Record of Abandonment of Lawful Permanent Resident Status) or surrendered by the holder, you are still subject to U.S. worldwide taxation and reporting.

If you are a non-resident alien receiving a Green Card during the year, you should determine the start date of your U.S. tax residency (e.g., the day from which you become subject to worldwide reporting in the U.S.) If you do not meet the substantial presence test, your first day of tax residency in the U.S. is the day you are issued your Green Card. If you do meet the substantial presence test, you first day of tax residency in the U.S. is the earlier of:

  • The first day of presence during the year under the substantial presence test, or
  • The day you are issued your Green Card

Substantial Presence Test

The substantial presence test may deem a non-resident alien to be a resident alien based on the number of days they have resided in the U.S. To qualify under the substantial presence test, you must be present in the U.S. for a least:

  • 31 days during the current tax year; and
  • 183 days over the current year and preceding two years, calculated as follows:
    • All of the current year days spent in the U.S.; plus
    • 1/3 of the days spent in the U.S. in the first preceding tax year; plus
    • 1/6 of the days spent in the U.S. in the second preceding tax year

You are considered to be present in the U.S. on any day in which you are physically present in the U.S. at any time during the day, except:

  • Days where you commuted to work in the U.S. from a residence in Canada or Mexico and back again, if you regularly commute to work from outside the U.S.
  • Days where you are present in the U.S. for less than 24 hours and where you are in transit between two locations outside of the U.S.
  • Days you are unable to leave the U.S. due to a medical condition that develops while in the U.S.

If you meet the substantial presence test, you can still be treated as a non-resident alien because of a closer connection to a foreign country. This closer connection is met if you:

  • Are present in the U.S. for less than 183 days during the current tax year;
  • Maintain a tax home in a foreign country during the current tax year;
  • Have stronger residential ties to the foreign country in which you have a tax home; and
  • File Form 8840 Closer Connection Exception Statement for Aliens with your U.S. return for the tax year

It is important to note that if you are physically present in the U.S. for 183 days in the current year, you may not claim closer connection to another country and are a U.S. tax resident. Also, if you have made an application for a change in status to Lawful Permanent Resident (Green Card holder) and are substantially present in the U.S., you are a U.S. tax resident under Regulations 7701(b)(3)(B) and (C). There may be relief from U.S. taxation through operation of the tax treaties in both these situations, but a U.S. tax return disclosing, but not taxing, worldwide income and full foreign information reporting would still be required. Careful planning around timing of the application for a Green Card is required.

If you are a non-resident alien qualifying under the substantial presence test during the year, you should determine the start date of your U.S. residency (e.g., the day from which you become subject to worldwide reporting in the U.S.) Under the substantial presence test, the first day of residency in the U.S. is the first day of presence in the U.S. However, you may exclude up to the first 10 days of presence in the U.S. for the purpose of determining the first day of residency if:

  • Those 10 days are non-consecutive;
  • You are a resident of another country during the excluded period; and
  • You have a tax home in another country during the excluded period

As an example, let’s meet Cassie. Cassie was born and raised in Canada and came to the U.S. for a work assignment in 2021. Her parents are not U.S. citizens.  She was in the U.S. for 142 days in 2021. She was in the U.S. for 99 days in 2020 and 42 days in 2019.

Cassie does not meet the substantial presence test in 2021 based on the calculation below. We could possibly file Form 8840 Closer Connection Exception Statement for Aliens for Cassie for 2021, as she was in the U.S. for less than 183 days in the current year, and presuming that she had a closer connection to her home country.

Year Days Present in U.S. SPT Inclusion Ratio Days Counted for SPT
2021 142 1/1 142
2020 99 1/3 33
2019 42 1/6 7
Total     182

Elections to be Treated as a U.S. Tax Resident

There are a few different elections available if you wish to be treated as a U.S. tax resident. These are summarized as follows:

  • First-Year Election 7701(b)(4)
    • If you will meet the substantial presence test in the next tax year, you may elect to be treated as a part-year (dual-status) resident of the U.S. in the current year, as long as you were present in the U.S. for at least 31 consecutive days in the current year, and in the U.S. for at least 75 percent of the time beginning with the first 31 consecutive days in the current year and ending December 31st of the current year.
    • Advantages:
      • May be able to claim additional exemptions for spouse and dependents
      • Can claim post-arrival foreign deductions and foreign taxes which would not ordinarily be available
    • Disadvantage:
      • Post-arrival worldwide income is now subject to U.S. taxation, however a foreign tax credit may mitigate the increased U.S. tax
  • Full-Year Elections 6013(g) and (h)
    • Spouses who are not both full year residents may elect to be taxed as full year residents, under certain conditions
    • This enables you to file joint returns (which can only be filed by full year residents)
    • Advantages:
      • Can use married, filing jointly tax rates and tax brackets
      • Can claim post-arrival foreign deductions and foreign taxes which would not ordinarily be available
    • Disadvantage:
      • Entire year’s worldwide income is now subject to U.S. taxation, however a foreign tax credit may mitigate increased U.S. tax
    • Please note that filing a Married Filing Joint U.S. tax return is a silent election to have both spouses treated as U.S. resident taxpayers for the full year. This election cannot be easily revoked after the filing deadline.

Income Tax Treaty

At the time of this writing, the U.S. has a tax treaty in force with 66 countries.  If you are arriving from one of these countries to the U.S., it is likely that the residency article of the respective tax treaty will help determine your U.S. tax residence status. As an example, Article IV of the U.S.-Canada Tax Treaty states:

  • Paragraph 1 – A “resident of a Contracting State” is defined to mean a person who, under the laws of that State, is liable to tax by virtue of their domicile, residence, citizenship, or other criterion. This basically outlines that tax residency is first determined under each country’s tax rules.
  • Paragraph 2 – By virtue of paragraph 1, an individual may be a resident of two Contracting States at the same time – a dual resident. When this occurs, the U.S.-Canada Tax Treaty provides tie-breaker rules for determining the country in which you are a tax resident. The tax residency tie-breaker rules look at the following, in order:
    • The country where you have a permanent home available to you
    • The country where your centre of vital interests is strongest. Your centre of vital interests is defined as your personal and economic ties, such as the location of your family and social relations; your occupations; your political, cultural, or other activities; your place of business; the place from which you administer your property; etc.
    • The country in which you spend the greatest amount of time (habitual abode)
    • The country of your citizenship (note that a U.S. Green Card holder is not a U.S. citizen)
    • Competent authorities of both countries will settle the question of your tax residency by mutual agreement if the above sequence of tests is not conclusive

U.S. State Tax Residency

Generally, each state has its own tax residency tests, which typically differ from the U.S. federal concepts. Many states use a domicile test, which considers you a tax resident of that state, even if you were outside of that state for a temporary period. Domicile is the place where you have your permanent home and where you intend to return if you are living or working temporarily in another state. Your domicile is a question of fact.

Many states also have deemed domicile tests. As an example:

  • Arizona deems you to be a tax resident if you spend more than nine months of the tax year in the state
  • New York deems you to be a tax resident if you maintained a permanent place of abode in the state, and, spent more than 184 days in the state during the tax year

Note that you can be a U.S. state tax resident, but not a U.S. federal tax resident. Likewise, you can also be a U.S. federal tax resident, but not resident in any state.

U.S. Estate and Gift Tax Residency

U.S. estate and gift tax has a different concept of residency than income tax. You are subject to U.S. estate and gift tax if you are:

  • A U.S. citizen, or
  • Domiciled in the U.S. (see above for definition of domicile)

No-Lapse Rule

If after departing and terminating U.S. tax residency in one calendar tax year, a non-resident alien returns to the U.S. and resumes U.S. tax residency at any time during the subsequent calendar tax year, the alien will be classified as a resident alien for the entire continuous period. This can lead to unintended U.S. tax implications, and thus should be closely monitored.

Conclusion

As you likely gathered from this article, U.S. tax residency is complicated! It is best to review your unique situation with a qualified cross-border tax planning advisor and financial planner as soon as you begin spending more than a couple of months a year in the U.S., and well ahead of your actual move date to the U.S. There may be opportunities to structure your financial affairs before being subject to the full U.S. tax and reporting system. For more information, please contact Cardinal Point.

How Can Personal Finance Software Help Me?

 

In the good old days, personal finance for most people meant simply balancing their checkbook once a week and making sure they had enough money in the bank to cover the monthly bills. Of course that was long before the days of multiple credit cards, electronic fund transfers, PayPal, and the dozens of other complicated financial transactions made by even the average person on a daily basis. These days, keeping track of person finances can be quite a chore and can often overwhelm you, leading to a less than perfect financial situation.
Modern life has created additional headaches in our daily lives, but fortunately it has also provided new tools to use to control them. Personal finance software is the best option for keeping one’s personal finances organized and up to date.
Personal finance software comes in many varieties, each offering a specific set of financial tools. The simplest forms simply keep track of multiple bank accounts, including credit card accounts. The most complete versions offer tax tracking, investment tracking, budget analysis, electronic banking and a long list of other features. How much you need depends on your situation and how closely you want to track your finances.
Most banks now offer free electronic banking to their customers. Make sure that whichever program you choose, it is capable of taking advantage of electronic banking. The vast majority of programs offer this feature as standard so you shouldn’t have to look hard. With electronic banking, you can easily check your balance, automatically download statements, transfer funds among accounts and have all your information seamlessly transferred into your electronic account register.
The two powerhouses of financial software are Quicken from Intuit Corporation and Microsoft Money. Both companies offer several versions of the program and generally offer the same features. The interfaces are slightly different and one’s preference will likely come down to which one appeals to you most. New editions are released each year to account for changes in banking and tax law and owners of the previous year’s edition will receive discounts to upgrade.
Another option that is growing in popularity is software that is kept entirely online. You never actually download a program to your computer and can access your information from any computer connected to the Internet, including SmartPhones. This is referred to as “cloud computing.” Some websites offer a low monthly fee to use the software and other sites are free and entirely advertising supported. Some people prefer this method for its convenience and other people stay away from these programs due to security fears.
Once you begin to use personal finance software you’ll wonder how you ever managed your finances without it. People become addicted to seeing the computer generated reports of exactly where their money goes each month. They often find this makes it easier to create a budget and stick to it. Even if you simply want to keep your basic checking account up to date, personal finance software is worth the small price.

Looking at Mortgage Prices On the Web

 

House owners who’re about to re-finance their residence might find the web to become a extremely worth it reference. The net is effective as it may give your property owner a great deal of info plus the power to assess various costs coming from various creditors from their own ease. Although these types of alternatives make re-financing a far more handy procedure there is certainly far more risk of threat. Nonetheless, house owners that exercising handful of wise practice with the web pertaining to re-financing end up finding they’re not from any extra chance.
Shop around anytime
Just about the most common benefits to studying re-financing on the web is to be able to shop around in the homeowner’s benefit. This will be significant simply because many householders perform extended hours and sometimes discover they’re not capable of meeting using loan companies through normal enterprise hrs due to employment vices. The world wide web, on the other hand, is actually wide open At any hour and also enables home owners to analyze his or her possibilities, help make crucial computations or even obtain on the internet estimates whenever you want of waking time using computerized techniques.
Property owners could also take his or her period researching the particular quotations these people get readily available creditors on-line rather than sensation urged to offer a sudden result. Whilst home owners might have a number of added time at hand, the house owners need to comprehend they are doing have to work fairly rapidly in order to secure quotations these people obtain because rates tend to be moment vulnerable naturally and should not become assured with regard to a long.
Only use Reputable Assets
House owners who will be online to analyze re-financing alternatives and get rates ought to cautiously look at his or her solutions when generating essential judgements about the issue regarding re-financing. Property owners that stay with popular loan providers along with set up web sites will never probable knowledge troubles nevertheless people that decide on a fresh loan provider might be surprised at the final results from the re-financing test.
House owners who’re uncertain regarding the trustworthiness of the certain useful resource as well as financial institution must do further investigation around the organization. One of several simplest ways to get this done would be to seek advice from better Organization Institution (Better business bureau). Your Better business bureau might be able to provide you with the home owner together with useful details concerning the amount of prior issues contrary to the organization. A firm who’s a lot of wavering grievances should be thought about the hard to rely on firm. Nevertheless, home owners shouldn’t believe organizations with no substantial amount of issues are usually respected except if the business has been doing lifetime for several many can be a person in the particular Better business bureau.
Property owners also needs to try not to become confused by simply expensive web site design. A domain that appears extremely skilled is just not always an internet site that can be correct as well as educational. Several experienced web site creative designers can make internet sites which can be equally desirable as well as professional. These kinds of site developers also can boost a web site regarding distinct mortgage similar key phrases thus people obtain the web page quickly when you are evaluating these kind of conditions yet this doesn’t automatically make web site custom proficient in the topic in order to re-financing.
Verify Loans directly just before Choosing
While you shop regarding re-financing alternatives on the internet is definitely simple and easy, home owners must look into doing the application form procedure sometimes directly or older the product as opposed to counting on an automatic method. As you move the World wide web will work for study reasons, property owners will take good thing about one on one conferences or perhaps mobile phone meetings ought to a bunch of their appropriate queries. Inquiring these concerns may help the particular property owner to be sure they know the credit conditions along with all his / her available alternatives.
Doing your re-financing procedure directly or higher the telephone may also steer clear of the property owner coming from staying surprised at any kind of portions of your mortgage re-finance. This will likely consist of further service fees that are added upon in the control with the request, prices that are only accessible in some scenarios or even additional factors with the re-financing contract that could considerably result the actual homeowner’s making decisions course of action.

Dany Bahar’s Why Not? Choosing the Right Attitude in Life

 

Who says you can’t have dreams in today’s business environment? To not have vision is to not have ambition. To not have ambition is to not have regard for yourself and others around you.
It is sad to know there are people who can’t see over the horizon. They walk towards it but when they reach it, they stop and don’t know whether to go left or right. So they stay where they are, lacking challenges and bogging further down into their own personal mire.
When people ask ‘why?’, the answer should be, ‘why not?’. The word ‘can’t’ doesn’t exist in the dictionaries of visionaries, captains of industry nor business owner’s dictionary. They say the word ‘CAN’T’ doesn’t exist because in every situation, whatever the hurdles ahead, ‘YOU CAN’.
Lack of experience or self-confidence should not prevent anyone from trying nor taking up opportunities. Look at some of the recognised world leaders: John F Kennedy for example – he refused to believe there is any other alternative to CAN. The CEOs of global conglomerates such as P&G, IBM and their ilk refuse to take ”CAN’T’ on the chin. These are leaders of men. Take Dany Bahar, CEO of Group Lotus, for example. He has actually proven this in both his personal and professional life; the word ‘can’t’ is obsolete. Undoubtedly, this attitude has led people to question his motives, but not his achievements.
When in the past, people have told him he can’t do something or, more maddeningly, that ‘it is not possible’, he got annoyed. Such is his determination of character and natural instinct that he has taken negative comments and turned them into positives actions. In fact, in every instance, he has gone out of his way to prove his disbelievers wrong, such is his nature.
There is a deep-rooted ambition inside people like Bahar – a motivation to achieve something extraordinary, something that goes beyond the norm, which propels them on. By focusing on the negativity of individuals, he believes that situations can be turned around to a positive energy. This has led to several conflicts in the past but only with those who lack vision. Although this approach has led to some individuals thinking him arrogant, this has never been his emotion nor intention.
He comes from very humble beginnings: his mother was originally a hotel cleaner and his father an electrician, but they both eventually aspired and achieved greater things. This gave him the inspiration to aspire to greater things and to accept opportunities when he was lucky to have been given them.
People like Bahar have never been attracted by so-called ‘normality’. They have never followed ‘the crowd’ as they say. They are people of their own convictions. They don’t want to walk in other people’s footsteps – they’d rather walk in their own.
They strive to achieve something different and the Dany Bahars of the world embrace things which are different. When he was given the opportunity join Group Lotus he embraced it. He had to put up with his cynics – those who said they didn’t know the ‘real’ Bahar – who said he was an enigma. But people like this man shrug it all off and say ”Does it really matter?
They are who they are and that’s what really matters and that’s also what makes them want to drive their businesses forward. In Bahar’s case it is driving the Group Lotus brand and propelling it – against the odds, mind you – back to the glories of its past but with a futuristic frame of mind.
He’s only been in the driving seat for a little over 18 months and he wouldn’t have moved from Ferrari if he hadn’t believed in himself and knew that the Lotus brand, which he already knew so well from his formative years, was destined for greater things.
He took over the helm from a very much respected, accomplished and able CEO – Mike Kimberley. He had to follow in great footsteps. But he was also coming from a different direction and he wouldn’t have been true to himself if he hadn’t employed the principles of his experience from the past. Where Kimberley was first and foremost a brilliant engineer, Bahar comes from another discipline. This was probably why his appointment was viewed with a certain amount of cynicism from both the media and those in the industry.
But everyone brings their own talents to a job. He is proof that if you apply the ‘why not’ attitude then you can succeed.
His real start in business came in the ’90s when he saw a vacuum in the sponsorship marketplace. His ‘why not?’ attitude led him to approach Benetton, a major multinational, when he was promoting in-line skating in Switzerland.
He was young and inexperienced, but had the arrogance of youth and the vision to believe that he could achieve something with that project. It set the stage for the next level of his career and he’s not looked back. With this philosophy, he has instilled an inspiration into the Group Lotus workforce.
Bahar – and others like him say that everyone has the opportunity to be inspired and to aspire to greater things and so perhaps ‘why not?’ should become the mantra for everyone. It has certainly worked for Dany Bahar.

Family and Personal Finance – Managing Your Personal Finances

 

Managing your Personal Finances is no different than a company managing finances. It’s all based on fixed and variable costs.
Family and personal finances are much like a company’s finances. Both are managed on fixed and variable costs. Fixed costs for your family would be the mortgage, car payments, insurance, heating, gas for the car, grocery, water and electricity bills. Variable costs might include eating out, movies, general entertainment, gym memberships, new clothes, or simply that coffee you buy in the morning. You won’t be able to completely do away with fixed costs. You’ll still have to pay a certain amount for these, but you can impact these costs and change the amount you spend. For instance, if your family only needs one car, but you have two, then eliminating one car payment is a tremendous monthly savings.
You can also change some habits, such as buying in bulk and spending less on groceries. Simple things like turning off the lights, taking quick showers instead of baths, and not running the water, also help. All of these little things can make a difference. However, the variable costs are those costs you can impact the most by changing your behavior. Not buying that A�1.00 coffee in the morning might seem like nothing, but everyday you decide not to buy that coffee is A�7.00 saved a week, A�30.00 a month, and over A�360.00 a year.
How often do you eat out for lunch or dinner? How much is that costing you and your family? The point here is not to say you should never buy anything. Rather, the purpose is to be aware of what you spend your money on, find areas to cut back on, and save money. It’s not as difficult as you might think. It simply starts with an understanding that you have both fixed and variable costs, and that you can impact both.
Take the time to write down your own list of fixed and variable costs and their appropriate amounts. After you’ve compiled your list, set a plan to reduce some of these costs. As you start to cut back, make sure that you apply the 70/30 ratio to your debt and savings. 70% of what you cut back on should go towards paying down your debt, and the remaining 30% should be added to your “pay yourself first” plan.
o Fixed costs: mortgage and car payments, heating, gas, water, electricity and grocery bills.
o Variable costs: eating out at dinner and lunch, entertainment, going out with friends, movies, coffee in the morning.
o Set up your own list of fixed and variable costs: Take the time to write down your own monthly costs. This will provide a better perspective on where your money goes.
o Use the 70/30 rule: Take the amount you are able to cut back on and apply 70% to pay down your debt, and the remaining 30% to your “pay yourself first” plan.
While this all may seem like a lot to do, it really is as simple as making smart choices. It’s simply a matter of deciding upon your priorities. The intention is not to lock yourself up in your home and never enjoy going out and having fun. However, you do need to make some concessions on how much you spend as a family. It’s not easy, but it is necessary.

Personal Finance – Understanding Personal Income and Expenditure

 

“It takes as much imagination to create debt as to create income” quote attributed to Leonard Orr; if this is the case, then why is it that we create debts more easily than an income? well, most of us do, I know I do… I work so hard to create my income but on the contrary I easily get into debts.
In the last 5 years I have found myself getting into more and more debts, the more debts I get, the easier it gets for me to get to the next one and the next. My bank does not help either, the more debts I have, the higher the borrowing rates I am banded in, I guess it is because I am considered as a high risk to the bank.
Then there is overdraft charges, bounced direct debit charges, checks, late payments on my loans, utilities, mortgages all compounding into increasing my debt thus lowering my credit score and consequently increasing my APR… my debts feels like snow ball, free falling from a hill getting bigger by second, getting more and more out of control.
I took upon myself to look back at how I got into debts in the first instance; I knew if I have any chance of regaining control of my finance, I will have to know how I got in. It pays to understand how one gets into debt, and to do so, understanding income and expenditure is important.
Income is any earning that lands at your disposal, it may be money earned through paid employment, as business profit, or from investments. Expenditure (or sometimes known as expenses) is any transaction that takes away your earnings, for instance paying bills, mortgage, loans etc.
Income and expenditure chart, table or write up, (also known as cash flow) is a snap-shot of your earnings versus expenses. It is in essence looking at what you earnings (income), usually monthly against expenses (outgoing). An average person would not bother writing down his/her cash flow.
Using cash flow, it is easy to see how one gets into debt. When income is lower than expenses (also known as negative cash flow), the shortfall (deficit) has to be covered somehow from somewhere and for most of us it is covered by borrowing (loan, credit cards, store cards).
I began to learn that, if I am to avoid getting into debt, I will have to “live within my means”, i.e. at least break even between my income and my outgoing. To do this, I needed to master my will, guts and learn not to be ashamed of where I was, financially.
Most of the time, the pressure of conforming to other people’s expectations (keeping up with Joneses) is the one that gets us to live beyond our means, thus getting into debts. What we don’t understand is, debts have crippling effects and they are addictive in nature.
Robert Kiyosaki, in his book Cash Flow Quadrant (2000, p205) rightly said, “people who cannot control their cash flow work for those who can”; if we are to become free, we have to learn to control our cash flow and this begins by WRITING DOWN monthly cash flow account (personal income and expenses account)… it is surprising how those unplanned A�5 expenses quickly adds up to A�100’s plunging one down into ‘negative cash flow’.
The aim is to take control of the personal cash flow with the objective of creating income higher than expenses, positive cash flow (surplus) and use the surplus to get out of debt, invest to create more surplus and of course to ‘spend’ on pleasure. My personal motto is: “live within my means, then increase my means”, for pleasure, use surplus only… thus, no surplus, no pleasure.

What is a Rate For Life Credit Card?

 

There are as many different types and styles of credit cards as there are financial institutions. The different types may be more suitable to one situation than another. A Rate for Life credit card can be a useful tool for helping to get debt under control by fixing a flat rate to the transferred balance.
* What is Rate for Life?
The premise is simple though the name can be interpreted differently. Rate for Life specifically refers to the life of a transferred balance to the card. Different providers will offer a low interest rate on the transferred balance but have a normalized APR for additional purchases made on the card. This low interest rate usually only applies on transfers made within a specified amount of time after the card is approved and until the transfer balance is paid off.
* Example:
Rate for Life Credit Card A offers a 5.9% interest rate on all money and balance transfers made to it within the first 90 days of acceptance with a 1.5% handling fee. Credit Card A features an APR of 16.9%. No matter what other purchases are made on the card, the original transfers will only be billed at 5.9% interest rate. Any additional purchases with Credit Card A will fall under the 16.9% APR and be subject to possible fluctuation of the rate.
* What kind of duration can I look forward to?
Unlike an APR that can fluctuate, a Rate for Life will not. The fixed rate will stay in effect for the duration specified by the card provider. This will differ between providers. Some companies offer a zero percent rate for transfers for 12-15 months that will convert to standard charge rates at the end of the grace period. Other cards will offer a low Rate for Life for the lifetime of the transfer balances no matter the duration. It simply depends on the card and provider.
* Example:
Credit Card A offers a consumer a 5.9% Rate for Life on balance or money transfers made within 60 days of establishing the account. That initial transfer balance will always enjoy that rate until it is paid off or switched from that particular card.
Credit Card B offers a consumer a 0% Rate for Life on balance or money transfers made within 60 days of establishing the account. After 15 months, this rate will convert to the standard APR of the card. Any additional charges on the card other than the grace period transfers will be at the regular APR.
* Can a Rate for Life credit card help me reduce debts?
There is no clear cut answer to that question. It will largely depend on your own personal circumstances and what you currently owe. A Rate for Life card can be an excellent way to get large debts locked into a good interest rate for future repayment. One will need to sit down and do the math behind their current payments and what they will be agreeing to. It should also be noted that many providers charge a small percentage of the balance being transferred as a handling fee. This fee should also be figured into the final calculations of the transfer cost.
}

Advice On Using A Sell And Rent Back Company

 

Financial hardship is something that no one is immune to. Especially in these hard economic times, it has become harder than ever to break out of the mould and live a truly financially free life. However, when times get rough, it is crucial that you don’t lose hope or give up. Giving up will not solve your problems or make them disappear. When you are having financial problems, you should be actively searching for ways to improve your circumstances. One strategy you can use immediately to get some extra cash flow is to ‘Sell and Rent Back’ your home.
‘Sell and Rent Back’ is exactly what it sounds like. You sell your home, only to rent it back at a price that is usually more manageable than your mortgage. ‘Sell and Rent Back’ companies buy the house below current market value. They typically pay around 60% to 70% of what the house is worth, although there are occasions when a house may sell for even less. A few S&RB companies do offer to pay the full house value at a later date. Once you’ve sold the house. You are still allowed to live in the house. However, your status changes from home owner to renter.
There are numerous benefits if you decided to sell and rent back. Off course the main one is that you can raise up a large amount of capital which you can use to remove or loosen some of the pressure of debts and bills. It is one of the quickest legal ways to raise a significant amount of cash. Another benefit is that you won’t have to move and restart your life in a different home which is especially good if you already have a family. You can continue to live in your house as if you were still the home owner and won’t have to uproot yourself and your family. ‘Sell and Rent Back’ companies also practice great discretion. No one has to know that your status changed from home owner to renter.
‘Sell and Rent Back’ is a great opportunity that can help you change your life around, but only if it is done right. And that starts off with you picking a good company to work with. When looking for a ‘Sell and Rent Back’ company, you should steer away from any new start ups or companies that don’t really have a lot of history or background. You won’t be able to get a clear picture of the intentions of the companies. Instead, you should move towards companies that have a lot of positive reviews and a vibrant background. Selling and renting back isn’t something you should just trust to any company that pops. Be very selective in who you decide to work with.
Finding a reputable company is only half the battle. The next step will be to get to know the insides and out of the company that you are going to be working with. Be sure to read all of their policies and procedures. Before you sign any documents, make sure that you look over it a couple of times. If you need clarification on a certain point, don’t hesitate to ask. These contracts are going to legally bind you a company and out of the best interest of you and your family be sure that they are favorable to what you are trying to accomplish.

Bad Credit Auto Loans, Co-Signers & How Some Car Dealers Abuse the System

 

Many people that have bad credit are told that they may need a co-signer or co-borrower for an auto loan. Understanding co-signers and how they can be of benefit to overcoming bad credit is something that confuses many people. Mostly, because of some of the deceptive practices that take place in car dealership.
In the past, co-signers were merely used as a way to help someone that had no credit history to obtain their first car loan. Now, as finance managers and loan officers have had to work hard to try to help people with bad credit, co-signers are often used for bad credit auto financing.
Avoid the “Co-Signer Scam”…
In some dealerships, when someone with bad credit comes in, they are told that they need a co-signer. A common trick is to tell the customer that the co-signer will only be second on the loan and only liable should the loan be defaulted on. The co-signer scam is where the finance manager puts the person that you both think is the co-signer, as the primary borrower. This leads you to believe that the co-signer is only signing as a guarantor, when in fact, they are used as the primary borrower.
In some cases, the person with bad credit that needed the “co-signer” is not even on the loan. The finance manager in this case, will have the person with bad credit sign a part of the contract that is irrelevant, to make them think that they are on the loan, when they are in fact, not any part of the contract.
This harms the people that are liable for the loan with auto insurance complications as well as, when the person that thought they were on the loan contract has to call about the loan and is told that they can’t speak to the loan company without the other person’s permission. This is a wide-spread problem and is an abuse of the system that is common in some car dealerships. (Don’t expect them to be happy about this being published).
Co-signers & Credit Cards…
Many people that have credit cards, have the option of adding another “user”. This is done by simply providing the person’s social security number and basic information and can usually be done online or over the phone. What is not commonly known, is that the added “user” become liable for the full balance of the credit card, should the original card holder default. This is something to keep in mind when considering the addition of other family members as “additional card users”.
If you have bad credit, co-signers may or may not help. THere are good sources online that can help you to obtain auto financing, without having to go through the typical dealership sale process. Bad credit is a challenge, but there are legitimate companies that operate outside of car dealerships that are willing to help you.