Have you ever received a gift card for somewhere you never shopped? These dedicated websites are all about exchanging gift cards for cash, so you can finally use the money sitting on a gift card from your relative, who won't stop asking if you've spent it. The drawback of these sites is that there is often a fee associated with exchanging the card, and you may not get the full value of the gift card in cash. However, it's far better than sitting in a cupboard gathering dust! Most sites featured in this guide offer between 80-85% of the gift card's value, offering you the chance to put the cash to good use.

Sites have advanced, so you don't need a physical copy of the gift card. Due to increased e-gift carding, you can now exchange digital codes and credit. It's always good to be wary of less reputable websites, as some will sneak in hidden fees or withhold payment, wasting time and money. To give you peace of mind, we've included tried and trusted sites within this guide alongside less unreliable ones so you can exchange your gift card with confidence.

Some exchange sites also sell 'second-hand cards' at a lower rate. If you know, you'll shop at a specific retailer; this can be a great opportunity to score a great deal. However, these codes may not be valid or have already been used on more unsavory websites, so it's always worth researching ahead of purchase. For more help deciding where to shop, check out our guides to the best auction sites.

The best gift card exchange site overall

With a well-designed website, Raise is an easy gift card exchange website to use. The layout is clean, modern, and it's clear where to go to buy, sell, and earn rewards. There's a free mobile app too which has the same design ethos and is equally simple to navigate. From the moment you purchase a gift card, Raise will give you an entire year to refund your purchase price if the physical card doesn't arrive, has an incorrect balance, or is just simply not the card you ordered.

In our experience, Raise has offered us good money for our gift cards and had deals on top retailers with the additional benefit of cashback where gift cards weren't available. You're promised around 85-90% of the value when exchanging gift cards for cash, which is on the lower end among other exchange sites. However, some websites can levy hidden fees, so we found that the final amount was quite comparable.

With the option of being paid via PayPal, direct deposit, and a check in the mail (which comes with a large fee, so we recommend avoiding this option), there's guaranteed to be an option to suit your needs. The Better Business Bureau has also given it an impressive A rating, making it our top gift card exchange company to recommend.

The best gift card exchange site for buying cards

Featuring impressive discounts of up to 31%, Gift Card Spread has a large variety of gift cards to suit many different needs. The website is easy to use and quick to search gift cards alphabetically, but also be price and card type. Each retailer has a saving of 'up to' a certain amount, and you can then click through to explore the more specific options available to you.

Unfortunately, the process of selling your card is far too complicated to be worth the effort. Gift Card Spread rates highly for purchasing gift cards, especially when it comes to the user-friendly search functions, and it's best to stick to this as it's main use. For anyone looking to exchange or sell gift cards, we advise sticking to other sites that deal with this as their primary role.

The best gift card exchange site for sellers

While CardCash offers 'up to' significantly large discounts on vouchers, the reality leaves a lot to be desired. There's often less than a percentage off full retail price, which isn't worth the hassle of buying through a third-party site. If you are able to find a good price, however, there is a 45-day guarantee on all purchases to sweeten the deal.

Like some other sites in our round-up, you're likely to have more luck with selling your gift card on CardCash than you would be buying one. The rates offered by the site for selling your gift card were higher than competitors, making them a great option if you're trying to earn back the most money possible. You can also select to receive the money by PayPal or direct debit payments, so you have it in your account in a matter of days - far quicker than waiting for a check in the mail.

The best gift card exchange site for selection

A free app to use on the go boosts Gift Card Granny's rating significantly. Being able to effortlessly navigate the app on your smartphone makes it even simpler to browse through cards to buy. It has gift card options from dozens of exchange websites and retailers, offering something for everyone. Cashback is also on offer, so you can customize eGifts for sending to loved ones.

Gift Card Granny is packed with lots of useful, informative content and has tonnes of options listed available to buy, however, it doesn't offer you the chance to sell your gift card. If that's what you're looking for, then you would be better off looking at a site with this option. However, Gift Card Granny does have an extremely comprehensive list of over 1300 brands making it a one-stop-shop for buying discounted cards.

The best gift card exchange site for inventory

Card Kangaroo has an inventory of about 1,300 cards as of last November and has served nearly 59,000 customers. You can use this website to buy, sell or trade your unwanted gift cards or simply check the remaining balance of a card you found in your wallet. CardKangaroo guarantees the stated balance up to $500 of purchased gift cards for 100 days from the day you buy them. They accept major credit cards as well as PayPal.

If you're looking to sell cards you simply select the merchant, value of the card and get an offer from the website. This company is unique in that you'll receive a shipping label and be asked to mail your gift card in, rather than simply providing the card's number and other information. If this isn't too much of a hurdle for you, CardKangaroo is a great gift card swap option. You'll receive payment via a check in the mail or through PayPal.

If you'd rather trade for a different gift card you simply click that option after providing information about the card you no longer want. Once you've picked which gift card you want, you'll have to ship yours in before getting the one you swapped it for in the mail.

The best gift card exchange site for customer satisfaction

If the other companies we tested aren't giving you the results you want, you might want to consider GiftCardBin. You can search by discount, store, category or your own favorites once you create an account. You can buy electronic or physical gift cards and if you choose the latter you can expect it in the mail within ten business days. Digital cards will appear in your account within two business days - longer than some promise. 

You can also get vouchers printable at home and redeemable in-store for certain retailers. We saw discounts as high as 31% during our testing, which meant you could buy a $140 Lane Bryant card for less than $100. That said, you’d need to be confident in making a large purchase for this deal to pay off. 

We saw some impressive savings with GiftCardBin, so it’s worth signing up for alerts in case any of your favorite retailers crop up with a great deal. Whilst not accredited, an A+ BBB rating indicates a high level of customer satisfaction - one of the major perks of GiftCardBin in comparison with leading sites. 

How to choose the best gift card exchange site

The RGCA was founded in 2008, and its goal is to grow and preserve the gift card industry. At the same time, the group recognizes the risks associated with using third-party resellers like gift card exchange websites. In an official statement on the RGCA website, users are encouraged to educate themselves on gift card exchanges before using one. It has several tips to keep in mind while shopping for gift cards to ensure you're getting a good deal and avoiding fraud:

• Use exchange services that verify the balance of a gift card before selling it.
• Make sure you can track your payout method through the gift card exchange website.
• Use gift card exchanges with buyer guarantees that are in effect even after you receive your card.
• Never give out gift card information over the phone to someone claiming to be with the police, a utility company, the government or any other third party. These agencies do not accept payment via gift card.
• Store your cards in a secure place.
• Until you’re ready to use the card, leave the scratch-off material on the PIN number on the back of the card.
• Use gift cards quickly.
• Read the fine print. Make sure gift cards don't have any extraneous fees.

Why did we not list Cardpool?

The reason we can't recommend Cardpool is that it has an F rating with the BBB, the lowest rating they give. Definitely worth taking into account! We read many reviews that suggested Cardpool did not send out cards or pay the proper amount when purchasing from sellers. As such, we cannot recommend this site, but you are obviously free to consider it.

One of Cardpool’s main advantages is its one year guarantee. Unlike competitors such as CardCash, who only guarantee for 45 days. Cardpool also gives you the option of being paid in Amazon gift cards: a unique offer among the companies we reviewed. We particularly liked the Cardpool app, which gives you access to a digital wallet and allows you to buy gift cards on the go; maybe even while waiting in line at checkout. You can pay in-store directly from your phone and get your shop for less. 

One disadvantage is the app is only available on the Apple App Store. Popular stores see lower discounts. However, it’s still a good way to save a few bucks if you’re making a bigger purchase and it’d add up over time. We saw much bigger discounts on other retailers such as American Eagle, which offered a 17% discount.

What about Cardpool kiosks?

Cardpool is unique in that it offers its gift card exchange service through kiosks. These kiosks are usually located inside another store, such as a Target, and you can locate one using Cardpool's online map search feature. Once you find a location, simply bring all your unwanted gift cards to that store and swipe them at the machine. You can also exchange electronic gift cards.

The downside is the cards must have at least $15 on them and no more than $1,000, so that Starbucks card in your wallet with a couple dollars on it won’t work. You can get up to 85 percent of the card's value at a kiosk, though your return will vary depending on the type of gift card you exchange. The kiosk prompts you to enter your personal information and then offers you cash in return for the cards. Finally, you collect your money from the store's service desk or at the kiosk if you have a reloadable Visa gift card.

To use a kiosk you need a government-issued ID, cell phone number, email address and sometimes a credit card number. This is to prevent fraud and keep someone else from collecting your cash at the store’s service desk. If you are asked to enter credit card information, Cardpool will never charge it without your permission. However, if the gift card you sell was obtained illegally, you could be charged.

If you are used to using Coinstar kiosks you probably noticed some changes in recent years. Cardpool now owns Coinstar Exchange kiosks, so these machines can also be used for counting your change and giving you cash along with exchanging your unwanted gift cards. These machines are usually green. Gift Card Exchange kiosks are yellow and only work with gift cards.

How we choose the best gift card exchange site for this guide

We’ve been reviewing gift card exchange websites since 2010, and we know it can seem like a roller coaster. The payout for selling a card and the discounts available when buying them seem to fluctuate almost daily. That’s because it’s a supply-and-demand market. The more of a certain card a website has, the more of a discount they’ll offer on it. On the other hand, if there is a high demand for a small number of cards, the discount will be less.

The gift card market is massive. Physical cards are growing at an annual rate of 6% but digital cards are doing the same at a rate of 200%, according to CardCash.

Marina Hodges, chair of the Retail Gift Card Association said the group is made up of about 90 members representing retailers, card producers, gift card exchanges and others. She said opinions differ by retailer, but most are in support of exchanges.

“If I’m a retailer it’s great for me because then the person who has my card is going to shop with me versus throw it in a drawer,” Hodges said.

We went through every part of these gift card exchange websites to see how well they work and whether they’re worth your time. We bought gift cards from leading retailers and found out how much we could get in return for selling them. We also checked out how big the discounts were on cards available for purchase from top brands. When it was an option, we also downloaded the app to make sure it worked as advertised and while the majority of gift cards out there are digital, we also looked at shipping rates for shoppers looking for a physical gift card.

The number and variety of retailers you can buy gift cards on exchange websites changes all the time. Instead of trying to keep our thumb on how many individual retailers were available, we searched for three big players –  American Eagle, Macy’s and Walmart – at the same time on the same day across all the websites we tested. We then assigned a letter grade corresponding to whether the website had cards available for purchase from those retailers.

We also used the Better Business Bureau to make sure these gift card exchange websites are legitimate. The BBB is a consumer watchdog group which assigns ratings A+ through F to companies based on information from business and customer complaints. These ratings aren’t a guarantee, but they’re helpful in seeing whether businesses and websites have had consistent problems or consumer complaints.

Gift card exchange site FAQs

Prepaid vs gift cards

A gift card is essentially like cash you can only spend at a specific store. You use the card until the balance is gone and then discard it, though some retailers allow you to add more money to the card so you can continue spending with it. Not all stores allow you to reload existing cards, and there's a chance the store could give you a new gift card every time you want to add money. One red flag to look for are fees, as gift cards shouldn’t have any. If a retailer tries to charge you a fee for using a gift card, we recommend using another method of payment or simply shopping elsewhere.

Prepaid cards are designed to be reloadable, and as such, they sometimes carry fees. These vary by card, so it’s important to read the fine print if you go this route. These cards are often available from credit card companies like Visa and can be used on everyday expenses. Wallet Hub found prepaid cards can cost a person up to $311 per year in fees though, so if you can, you should opt for cards directly from a bank because they have fewer fees and a more secure guarantee. Or, you can avoid this quagmire altogether and opt for a gift card. If the person can't find anything at the store it's good at, they can use a gift card exchange to swap it for one they’ll love!

Physical vs digital

When exchanging gift cards, make sure you know what you’re getting. Some websites deal only in digital gift cards. This means you’ll receive a code via email, usually within a day or two. These codes can then be used for online shopping, though most retailers will let you use them in person at the cash register if you have all the required information like the full card number and activation code. Some websites will send you a physical gift card in the mail, but that means you’ll have to wait longer for it to arrive. Our research shows it usually takes about seven business days for cards to get to you, but that’s on top of the one or two days it will take for the company to process your order and get it in the mail. If you’re in a hurry, digital gift cards are the way to go. Another thing to keep in mind when deciding between digital and physical gift cards is how organized you are. If dozens of punch cards and gift cards tend to get lost and forgotten in your wallet, a digital card will be much more useful. On the other hand, if your computer’s emails and files aren’t well organized, you might want to opt for something physical you can keep your hands on until you need it.

How much do gift card exchanges cost?

If you’re selling an unwanted gift card, exchange websites take a cut. It depends on the website, card you’re selling and overall demand, but most take 15% or less. If you’re buying gift cards you can expect to see discounts of up to 35%, meaning you’d pay $65 or more for a $100 gift card. This too depends on the retailer and demand for that card. We found these discounts to usually be a bit more modest.

Gift card selection

Because users are buying and selling cards all the time it’s difficult to say exactly how “good” one website’s selection is compared to another. While our tests looked for three well-known gift card retailers across all websites, we acknowledge this is flawed because those cards could reappear or disappear from any site at any time. What we’d recommend is to shop around; if you can’t find the gift card you want on one website, you might be able to find it on another.

Read the fine print

While you’re shopping around, make sure the website you’re using is reputable. We made sure all of the websites we reviewed were secure, but we also found some sketchier options out there we wouldn’t recommend. Make sure wherever you’re shopping has responsive customer service representatives and never give out your credit card number on websites that aren’t secure. Secure websites have a small padlock symbol in the address bar, sometimes accompanied by the word “secure.” We’d also recommend making sure wherever you’re shopping has some kind of buyer’s guarantee so you’re protected when buying from secondary sellers.

Most popular gift cards

According to Wallet Hub, Amazon was the most preferred gift card last year. When you're looking at gift card exchange websites check out Cardpool, which offers Amazon gift cards in exchange for cards from retailers you don't buy from. Visa was the second most preferred gift card, followed by Walmart and then Target. Keep this in mind if you're shopping but don't know what kind of gift card to get a friend or loved one. These retailers are very popular, so the odds are this card will get used. Amazon knocked Walmart out of the No. 1 spot in 2017, which signals the rising popularity of online shopping. Some other preferred gift card brands include Kohl's, Disney, Sephora, Home Depot, McDonald's and Starbucks.

Multi-store gift cards

You've probably seen them at stores like Walmart or CVS. Usually displayed on large stands, you can oftentimes purchase gift cards from numerous retailers without having to visit the store itself. These cards usually work for restaurants or businesses that are owned by the same or partner companies. For example, a Darden Restaurants card works at Olive Garden, Longhorn Steakhouse, Cheddar's and several other eateries. These cards are great if you're unsure what kind of card to get a person or simply don't know much about what they like to eat or buy. Along with more customer choice, these kinds of cards are good because you're protected in case one store or restaurant closes. They also don't have any fees.

Gift card security

Whether it’s around the holidays or not, scammers look for ways to steal information and money. You might feel safe and secure using your debit and credit cards at everyday retailers or big box stores, but some of the largest companies have experienced data breaches that left consumers vulnerable.

It might be easy to use your credit or debit card, but it’s not always safe. In December 2013, Target confirmed the credit and debit card information of roughly 40 million customers had been stolen. The number of customers affected later increased to 70 million. The New York Times reported the company ultimately paid a settlement of $18.5 million plus $202 million in legal fees, but millions still had their personal information stolen. If you shopped at Best Buy in September or October of 2017, you also may have had your information stolen. The same can be said for Sears and Delta Airlines according to USA Today.

Gift cards can help you avoid having your identity or information stolen. Simply purchase gift cards at retailers you frequent with cash and use them like debit cards. This eliminates the need to use a credit or debit card and potentially put your personal information in a vulnerable position. You can also use gift card exchange websites to acquire gift cards and use them to make everyday purchases at stores you frequent. There’s no reason to save a gift card to buy something special, and the added sense of security is a nice bonus.

Can I use a gift card anywhere?

Gift cards have to be used at the merchant that is listed on the card. This is of course not the case with multi-store cards, which usually list every store you can use it at on the card. Visa preloaded cards are also an exception, as they can be used anywhere in place of a debit or credit card or cash.

Will a gift card exchange rip me off?

The gift card exchanges we reviewed are all reputable with secure checkout, so your information stays safe. You won’t get 100 percent of the value of the gift card you’re selling, but that’s normal; it’s how gift card exchanges make money.

Will gift card exchanges take my really obscure gift card?

Most gift card exchanges only accept cards from national chains or retailers. A card to your local mom and pop shop most likely won’t sell unless you live in a major city.

Is my gift card expired?

You can find out by visiting the retailer’s website and looking up the balance on your gift card. If you’re still having trouble figuring out your balance you can call customer service or visit the store in person.

What happens if a gift card exchange gives me a card with an inaccurate balance?

Contact customer service for that exchange, and tell them immediately. They’ll be able to right the wrong and get you back any money you lost.

Reusing gift cards

If you know your way around gift card exchanges and have used them many times before, you may have reached the point where you have a bunch of cards with $0 balances. Don’t despair! We here at Top Ten Reviews won’t leave you hanging.

There are a lot of things you can do with a gift card once you've used it. The Balance Everyday, part of Dotdash publishing, recommends putting more money on the card and giving it away as a gift. Cards with beautiful patterns or designs can even be cut into shapes and used as design or scrapbooking embellishments. You can also easily turn an old gift card into a stencil with a pair of scissors. In addition, cutting a jagged or curved edge makes an empty gift card a great pottery tool.

This Old House, a home builders website, has a lot of home improvement uses for old gift cards. For example, they're extremely handy to have in your pocket to use as a straight edge. You can also use a gift card to glue down loose tiles rather than getting a trowel dirty. In addition, the website says gift cards can be used to smooth out air bubbles in wallpaper or to caulk your tub, and you can use one as a miniature paint shield in tight spots.

Pinterest users have also compiled a long list of alternative uses for gift cards, including using them as covers for mini journals, cutting them into shapes to make magnets or recycling them as guitar picks. If you have a sharp enough blade, you can even cut a gift card into a multipurpose tool to keep in your wallet.

Gift card exchange and Reddit

If you're looking to swap gift cards in an unofficial way, one option is Reddit's gift card exchange program. Note, however, that this swap program is merely a community of Reddit users following a set of guidelines. The program is not officially run by a company. As such, there is no one to back up your purchases, and it's possible to get scammed. That said, there are 32,000 traders in the community who swap cards. Because the program is not monitored or controlled by a private company, there’s no one to charge fees to reduce the value of your card; you could get 100 percent of the value of your card if you find the right person to swap with. The GCX Safe Trading Guide outlines the precautions you should take before swapping cards, including verifying a user's account age and karma and making people send you links to their GCX Rep Profiles. Google Chrome users can also add the Reddit Scam Labeler extension to their browser for an added layer of security. Even if you take every precaution, however, it’s possible to get scammed, so we recommend using one of the gift card exchange websites we tested.

Whether you're a true Swiftie or you've just tuned into social media this past week, it's been hard to ignore the huge issues surrounding getting tickets for Taylor Swift's new Era's tour. Ticketmaster was chosen as the sole ticket provider and saw unprecedented demand with over 14 million users trying to buy tickets. 

Constant glitches and faulty pre-sale codes also made it a gut-wrenching task when fans did finally get through to adding tickets to their baskets. And those that did manage to get to the final hurdle became victims of dynamic pricing, where sheer demand skyrocketed ticket prices so that many were struggling to justify nosebleed seats.

In a devastating turn of events, Ticketmaster then canceled the general sale of Taylor Swift tickets, so if you missed out on the elusive pre-sale, you're almost out of luck. 

With such an anticipated event, it's understandable that many fans have been left feeling defeated and deceived by the experience. Taylor issued a statement against Ticketmaster's practices where she wrote: "And to those who didn’t get tickets, all I can say is that my hope is to provide more opportunities for us all to get together and sing these songs". So, there is a glimmer of hope that more tour dates will be announced in due course. 

However, re-sale concert ticket sites are currently the only option for scoring Taylor Swift Eras Tour tickets, which can often feel like tiptoeing into the unknown of potential scams. Here, we've explored the best concert ticket sites to offer you peace of mind if you do decide to take the plunge, and the safest ways to ensure that the tickets you're buying are legit. 

Should you buy Taylor Swift tickets right now? 

With Taylor's statement implying a glimmer of hope for more North America tour dates, you may be facing the dilemma of holding out for a general sale or hedging your bets with re-sale tickets. 

If you can afford to pay re-sale tickets, there's no harm in choosing to go down this route. It can often seem like a risky avenue when the excessive demand results in a higher amount of scams, however, there are websites with guarantees in place to minimize the likelihood of this happening as much as possible. 

What are the best concert ticket sites to buy from? 

Buying concert tickets is often a stressful task, so ensuring you're buying from the best concert ticket sites is key to creating added peace of mind. 

Despite faith in Ticketmaster faltering as a result of the crazy demand, they are still a reliable website for buying from as they offer a refund on any rescheduled event. 

For buying resale tickets, we've also rated ViaGoGo highly. Tickets can be priced higher than their face value, however, if the event is cancelled and not rescheduled you get a huge 135% refund. There is also a guarantee from the company that you will receive your ticket before the event. 

TicketCity is also a great choice for either buying resale tickets or selling unwanted tickets. They buy your ticket directly from you so there's no waiting around to see if it will sell, and equally reassurance that the ticket is in TicketCity's hands. 

If you're eagerly anticipating the chance to attend your favorite artist's next concert or your next comedy show, the best place to start your search is on the top concert ticket websites. This guide will provide you with all the information you need to know about ticket hunting, including the most reliable websites to find what you're looking for.

When it comes to purchasing concert tickets online, there are numerous options available, each with its own unique features. To save time, it is essential to determine what you are looking for before beginning your search on a specific site. Consider the type of events you enjoy attending, such as theatre, music concerts, or stand-up comedy shows, before selecting the best concert ticket site.

It's important to consider a few things when buying tickets online. Firstly, think about whether you prefer to sit or stand, and also take into account the availability and price of the tickets. If the show is sold out, you may need to look at resale rates. Some ticket sites allow you to buy tickets directly after they are released, while others specialize in obtaining tickets after they have sold out. It's crucial to prioritize reliability and safety when making significant online purchases to minimize the risk of being scammed.

Remember, with the holidays and after-Christmas sales on the horizon, there may be a number of great deals on the best concert ticket sites, meaning you can get a bargain experience. 

Luckily, we've done the leg work for you and rounded up this list of the best concert ticket sites to find the ultimate option for the tickets you're looking for. And if you want more specific picks, then take a look at the best sports ticket sites and best online auction sites, too.

The best concert ticket sites we recommend

We're on a mission at Top Ten Reviews to review everything we feature in our buyer's guide. While we haven't been able to test every entry in this guide in person, we've instead honed in on top-rated brands and used our knowledge of the best concert ticket sites to help you make the right decision.

The best concert ticket site overall

StubHub claims the top spot thanks to its clear emphasis on concert tickets, with various genres and options to sort through as you enter via the website's landing page. 

You can filter by lowest price, best location, and best deal, as well as specific seat types and types of ticket delivery, meaning everyone's preferences are covered. Moreover, the FanProtect promise offers peace of mind so you can shop with StubHub confidently. This ensures you receive valid tickets before the event; if you don’t, you will either be refunded with comparable or better tickets or receive a full refund. Using a reputable secondary broker like StubHub is a fast and secure way to buy and sell concert tickets, and that’s why we think it is the best service for most people.

If you don't have one of the best home computers or prefer browsing on your phone, the mobile app is easy to use and lets you access tickets on the day of the event. Once you purchase the ticket, a bar code on your phone will get you into the venue, so you don't have to worry about having access to a printer. You can also follow your favorite artists on the app and receive instant alerts about upcoming shows in your area. 

Not only does StubHub allow you to buy tickets, but you can also use the platform to sell any tickets to shows you can't attend. You can use either the computer application or mobile app to sell your tickets, and StubHub will collect 10% of the sale price. 

The best customer-guaranteed concert ticket site

Ticketmaster is one of the most well-known ticket sites and is most likely people's go-to destination for confidently purchasing concert tickets. The web interface is easy to use, with clear markers for different genres, and it will give you recommended concerts based on your purchase history. 

Thanks to its return policy, it's also a great place to shop for tickets. The site gives you three days after your purchase to change your mind when you purchase tickets for events at venues participating in the website's Fan Guarantee program. It's also the only site we reviewed that lets you return tickets for events that have been rescheduled and not canceled, which is great for added peace of mind and avoiding losing any money unnecessarily.  

Across the sites we reviewed, the prices on Ticketmaster were average, and you get the benefit of buying tickets from a primary seller. This means tickets for in-demand concerts may be cheaper on Ticketmaster than elsewhere if you can buy them in time. 

It's worth noting that Ticketmaster recently saw a lot of backlash concerning Taylor Swift tickets. They were chosen as the sole provider of the in-demand tickets and, due to unprecedented demand, had to cancel the sale of thousands of tickets, leaving many fans devastated. The site also glitched when customers were putting tickets into their baskets, causing a lot of confusion over whether they had actually secured tickets. 

With this in mind, you might avoid relying on Ticketmaster as a one-stop shop for in-demand tickets, but it is still one of the most reliable websites regarding price and customer support. 

The best rewards program for a concert ticket site

VividSeats didn’t have the cheapest tickets of the sites we reviewed, but concert lovers might be interested in shopping here regardless due to the impressive rewards program. You can get up to 8% credit on tickets depending on how much you spend, and if you’re a ‘Hall of Famer’ (meaning you spend over $2000 annually), this credit won’t expire.  

Like some of the complaints about Ticketmaster above, there's a lack of transparency about fees on VividSeats. Sometimes, the added fees could be almost as much as the tickets themselves. The only saving grace in this is the rewards scheme that could help you save money over time, but if you're not a frequent buyer, this won't benefit you. 

If you haven’t the budget to splash $2000 annually on tickets, don’t worry; your credit will last a full year. You can buy your tickets through the easy-to-use app or online, and if you have any questions, a customer service representative can answer them through the website’s live chat feature.   

VividSeats also has a 100% buyer guarantee, making the site much more tempting. It guarantees your tickets will be valid and arrive in time for the event, and you'll get a refund for canceled events. Unlike Ticketmaster, however, VividSeats acts as a middleman between sellers and buyers, so ticket prices are set independently by the reseller and based on current "market value." This might mean that ticket prices are a lot higher than on other sites due to sellers wanting to maximize profits, which could also change quickly. A website that acts as an intermediary also poses issues in not taking responsibility for any issues that may arise, which is something that has been noted in some customer reviews. 

The best concert ticket site for ease of use

See Tickets actually originated as a record shop in Nottingham, in the UK. It then grew in the digital age and, as a result, became an internationally respected ticket-selling site. It has kept its simplistic roots, with a super minimal site that's efficient and easy to handle. This is super useful in the ticket-hunting world, as it can often be a stressful and daunting task.

You can search by artist, event, venue, general location, and music genre. The top navigation ribbon allows you to browse by music, theatre, festivals, dance and clubs, events, comedy, sport, and attractions so it's not difficult to find tickets for events other than your typical concert. This category system allows you to discover gigs you might not have been aware of, which is a great way to find gifts for others. It's also an easy way to search generally through a certain event type if you've decided you want to go to a sports match but don't have any preferences outside of that.

You can sell tickets to your event if you are a music star. And while the site does say it will offer refunds if the event has "significantly changed," this refund policy is pretty strict compared to a lot of the competition. Currently, See Tickets doesn't have the option to resell tickets you bought, so you'll want to choose a more dedicated ticket reselling site for this.

The best concert ticket sites for international music options

Viagogo is based in London, so it caters to the UK music scene well, but it’s also an international platform, offering tickets for US gigs and covering more than 50 countries. You will find a wide selection of music types on this site, making it great for discovery – did you know C Pop was a thing?

The interface isn't as simple as some other sites, mainly due to its cluttered look. However, it has clear signposts to different events, such as concerts, sports, theatre, and festival tickets. Viagogo is a secondary ticket sale site, meaning they only sell re-sale tickets rather than having direct relationships with artists and events companies to sell the initial batch.

The tickets may be more expensive than other websites as sellers can put the prices above face value if they want. This does pose an issue with events that are really sought after (cough, Beyoncé), but it's pretty standard practice across resale sites. The good news is that you can also sell your own tickets on this site. All you need to do is create an account and search for the event you have tickets for, and then you can set your own price as advised by previous sales. You can do this from any device, too, so it's good if you're on the go and need to buy or sell last minute.

While resale tickets can often feel risky, you are covered well should the event be canceled and not rescheduled, as you get a massive 125% refund on what you spent. There is also a guarantee from the company that you will receive your ticket before the time of the event. Tickets are sent via tracked courier services, so you don't need to worry about being left in the lurch minutes before the opening act.

The best website for booking

SeatGeek has a clean website, making it incredibly easy to navigate and find exactly what ticket you're looking for. You can browse tickets by city, date, or genre. There's also a category for trending events, so if you don't know exactly what you're looking for but know you're keen to bag tickets to the hottest gig, it makes it quick to locate.

SeatGeek’s transparent fees are a big draw here, making it easy to know you’re getting the best deal possible and avoid a nasty surprise when you checkout. What’s more, fees were some of the lowest we found - making SeatGeek a great all-rounder if you’re after a good price. 

You can sell your own tickets on SeatGeek, too. So, if you can no longer make a gig, setting up an account and helping them find a better home is quick. The site offers dynamic pricing, so you can choose the price you sell depending on demand. This is great if you want a bit more cash in your pocket, but it does mean that those Taylor Swift resale tickets will skyrocket quickly.

Like many top concert ticket sites, SeatGeek assigns a deal score to each ticket, marking it with a color and number on a scale of zero to ten. This results in a straightforward and visually compelling arena seating chart. 

We liked SeatGeek’s shiny website and modern feel. It also has a great app available to Apple and Android users. Overall, a great choice if you’re after a bargain and a choice you can feel confident about.

The best value concert ticket site

TickPick's (previously Razorgator) selling point is no hidden fees. With complaints on other sites in this roundup that booking fees can often almost equal the same price as the ticket, this is a major win. It's easy to underestimate how expensive tickets can become when you add insurance, tax, and booking fees, so it's a great way to save a little bit of cash.

The site is great for its unbeatable prices, reasonable fees, and numerous search filters to help you find the perfect seat. The grading system offered by the site is helpful for people willing to compromise on price when it comes to seat value, and we found the claim of an average 15-20% saving to be accurate. 

The customer guarantee is a fairly standard offering, and there are some good options for support, so you can be confident that there's someone to talk to if anything goes wrong. If you're selling on the ticket, you can put tickets as 'open to bidding.' This is great if the tickets are really in demand and you're looking to make a few bucks, or you can select an outright price if you want the tickets snapped up quickly. TickPick will take a substantial 10% commission, but you can always factor this into your ticket pricing.

This is our pick of best-value ticket services, as the prices were consistently the lowest in our testing. We’re confident that you’ll snap up a good deal with TickPick.

The best concert ticket site for sellers

As opposed to some of the bigger names that made the best concert ticket sites list, TicketCity wasn’t our first choice of ticket sites. However, its ticket prices were lower than some competitors, and we liked its unique approach to helping you sell tickets fast. 

The site is a bit outdated, and the navigation ribbon has small text pushed to one side, but there are line-ups of the top sporting, music, and theater events for easy access. It's unclear what parameters you can search events by, so there's less chance of you stumbling across events you weren't already entering with the intention of shopping for.

Most websites let you post your tickets and set your own price, taking a cut of the money when you sell. TicketCity buys your tickets directly from you, so there’s no waiting around to see if they will sell. This is made even easier by how easy it is to sell your ticket to TicketCity, which can be done over the phone or on an online form. A great option if you’re looking to sell unwanted concert tickets. This is a benefit depending on how much time you have and how much control you want over the price of your tickets. If you're looking to maximize cash in hand, then selecting a site with dynamic pricing and bidding might be better suited for what you want.

Regarding customer support, the website has a live chat function that makes it quick and easy to find assistance. The cancellation policy is pretty standard, too, offering a refund if the event is canceled but not if it's rescheduled.

The best concert ticket site for search engine functionality

Ticketmaster owns LiveNation after being bought back in 2010, and it has more of a music focus. Unlike others on this list, it's more of a search engine than a dedicated ticket agency. We clicked through to buy tickets, and the site redirected us to SeeTickets to actually make the purchase, so it's important to know that it's mainly performing as a route to finding events.

With this in mind, it's a fantastically streamlined place to search for gig tickets, browse by location, genre, or date, and search directly for bands. The hero images are really helpful in making certain shows stand out and offer a visual experience that is easy to follow. The landing page also has many different trending events, so if you want to initiate the idea of buying concert tickets but aren't yet set on a specific gig, then LiveNation will be a great place to start.

There isn't much to report on the refund policies or the buying and selling experience on LiveNation, as it performs as a search engine. It redirects to Ticketmaster, too, so it's important to remember the policies of these sites you are actually shopping from.

Concert ticket site FAQs

Songkick's free concert calendar app

This concert calendar app is free and available for iOS and Android devices. It searches services like Apple Music, Spotify, and Deezer to find out what music you listen to and curates a personalized concert guide based on your playlists. Songkick sends notifications about concerts and festivals near your current location, allowing you to set a reminder to buy a ticket. This app also recommends bands and comedians not on your playlists to help you discover new and emerging artists. It displays pricing information, but we suggest using one of the licensed ticket broker sites we reviewed to ensure your transaction is secure and that you can get help and support if something goes wrong.

Bandsintown's concert planning app

This app has similar search capabilities as Songkick – it can sync to your playlists on popular streaming services and send notifications about bands you follow. However, because it allows artists to post tour dates free of charge, Bandsintown is a better option for searching for and discovering smaller local acts. It also has better social media features. For example, you can invite friends to a concert with a Facebook post, view tour news and updates, and post photos of yourself dancing or attempting an epic stage dive. Bandsintown is available in the Google Play and Apple App stores free of charge.

How we choose the best concert ticket sites

To find the best ticket sites, we checked prices for local and national concerts and events on the same day and noted the lowest prices available, as well as compared overall value for money. We also ranked sites based on price, availability, website and app features, and various events. We went through every step of the buying and selling process for tickets to ensure there were no hidden fees or issues with these sites, so you can be confident in picking the right concert ticket site for you. 

We’ve reviewed concert ticket websites for several years and know what to look for in the guarantees and money-back promises these companies offer. We’ve made sure to compare them all on guarantees for peace of mind and compare customer experience and customer service options to ensure that even if you experience difficulties, there’s a team you can trust to set things right. 

There's much to consider when determining the best concert ticket sites. When finalizing this selection, we looked at features such as pricing, availability, usability, mobile experience, and the entire end-to-end buying process. We then scored them, ranking the best experience at the top to make it easy to explore.

There can be a lot of hidden fees and other customer support issues, so we looked deeply into these, too, trawling through the companies' FAQs and guides to analyze how each site will work with you should there be any problems that arise in the buying process.

We also focused on delivery, checking how tickets were delivered, by whom, and how long you can expect to wait before your event starts.

Security and fees were two other areas we explored. We took your bank details, the website's build, and aftersales support into account to assess the reliability of the sales platform. When selling using these options, we found that selling online is more expensive than using a listing or social media as they take 10 to 20% of the sale price. We did, however, find them to be a safer option where your audience of buyers is far greater than it would be otherwise.

Are you tired of watching sports from home? You can find great seats for your favorite sports teams and matches at the best possible prices by using sports ticket sites. These platforms offer tickets to all major sporting events including NBA and NFL matches.

If you're trying to buy tickets for in-demand or sold-out events, these sports ticket sites can help you find exactly what you need. They offer resale tickets as well as cheaper options for events you might not have thought you could afford.

The best part is that you don't have to worry about the safety of your tickets. Most websites offer guarantees and insurance on tickets, so you can book with peace of mind. You can rest assured that your tickets are legitimate and have a money-back guarantee if your event is canceled.

When selecting the best sports ticket sites, we considered a variety of factors such as admin fees, website accessibility, stability, offers, queue systems, and hotel deals. We considered every possible feature to make sure we were selecting the best sites for you.

If you're busy planning your next night out, you might also want to check out the best concert ticket sites. Or find super rare tickets, it's worth heading on to the best online auction sites.

The best sports ticket sites we recommend

Top Ten Reviews is on a mission to review everything we feature in our buyer's guides. Still, while we work hard to make this a reality—or where this isn't possible—some of our guides still feature rankings based on our team's considerable expertise and research.

While we haven't been able to test any of the units in this guide in person, we've instead honed in on top-rated brands and used our knowledge of the best features to help you make the right decision for your home, all for the best price.

The best sports ticket site overall

Stubhub has tickets to over 60 different types of sporting events, making it one of the biggest sports ticket sites out there right now and our top choice. It came out as one of the best sites in our price comparison tests, where we compared and averaged the prices of tickets to three sporting events. 

Sports ticket prices can often quickly skyrocket as a result of hidden costs, so we made this the focus of our checks. Like SeatGeek, the site only added $8 in shipping and handling fees to a $25 ticket, which was less than every other website we tested. This, combined with a mere 10-percent ticket resale fee, makes it the place to get the best value for sports tickets. 

Stub-Hub, which is owned by eBay, allows to you search for events based on where you live, the sport you're interested in, or even your favorite team. The little fire icon will appear on tickets that are particularly popular for any given event, so you will know when there might be a chance of tickets selling out. Once you select an event, it's really easy to select the area of the stadium you want to sit or stand in. You can even see the view from each spot on the site's interactive seating chart. If you're not bothered about the view, you can instead sort ticket results by price, best value, or best seats. There's a StubHub app too, which makes it convenient to buy tickets on the go, or even right before an event.

If you can no longer make the sports event, you don't need to worry. StubHub allows you to resell tickets directly through the site, and it only takes 10% of the selling price. This is one of the lower resale fees we saw, as some sites can take a huge chunk which cuts your own take-home. Like on most sites, you're guaranteed legitimate event tickets, and you'll receive a full refund if the event is canceled. StubHub also owns Ticketbis, providing access to tickets for more than 10 million sports and other entertainment events happening in over 40 countries.

The sports ticket site with the best rewards scheme

Vivid Seats didn't have the cheapest offering of sports tickets that we saw across sites, but the rewards system is what makes it an attractive choice. The scheme rewards regular buyers with up to 8% credit when they buy through the Vivid Seats app, so if you frequently attend your favorite team's matches or you're the go-to booker for your friends and family, this is a handy feature to make the most of. There are heaps of sporting events to choose from, so there's bound to be something that takes your fancy. Plus, if you're a 'Hall of Famer' (meaning you spend over $2000 annually) then this credit won't expire. If you aren't quite spending that much, your credit will last a full year. 

The prices weren't the lowest that we saw, but they were still comparable with our front-runners. The fees on Vivid Seats tickets are what let the site down, as they were often hefty. In one instance, the fees cost more than the sports ticket itself, which is a less than friendly surprise to get at checkout.

Vivid Seats also has a 100% buyer guarantee that provides plenty of peace of mind if you're spending a lot of money on sports tickets. It guarantees that your tickets will be valid and arrive in time for the event, and you'll get a refund for canceled events.

If you're looking to buy resale tickets on Vivid Seats, it's worth noting that they act as a middleman between sellers and buyers. Therefore, prices can be a lot more than other sites as a result of higher demand. This could also create difficulty in reporting any issues, as they have to get in contact with the seller.

The sports ticket site with the best customer guarantee

Most of the sports ticket websites we reviewed only give you a full refund if the event is completely canceled, which is particularly frustrating if it's been rescheduled and you can no longer make the new date. One website also excludes events canceled due to weather, which puts your tickets and money at further risk. If you've already purchased a plane ticket to get to the game or used those sacred PTO days, this can be a huge issue.  

Ticketmaster has a 'Fan Guarantee' which means you have three days to get your money back. It doesn't apply to every single ticket the site sells, but it's still a pretty great deal. In the event of a total cancelation, you'll get a refund as well.  

The website has a clean design, and it's obvious to know where to look for various sports events, as well as concerts. You can search by city, zip code, dates, venues, artists, and events, so it's super easy to find something that you're interested in. Once you select an event, you can click through to see where the available seats are and weigh up the different views and ticket prices.

Ticketmaster has some of the most reasonable fees on sports tickets, but we did find that ticket prices fluctuated depending on the event. In one case, a ticket that most other sites priced at around $10 was on sale for $23.

However, Ticketmaster is one of the most well-known sports ticket sites, and it does offer a great cancelation policy. For this reason alone, it's sometimes worth potentially paying more for a site that won't let you down.

The best sports ticket site with an accessible website

SeatGeek has transparent fees and deal scores that make it simple for you to really know that you're getting the best deal possible. It's a site that you can feel confident using, which is important when you're spending a lot of money on tickets or relying on them to watch your favorite team. Plus, some of the fees were the lowest we found, making SeatGeek a great sports ticket site if you're after a good price. 

We appreciated the clear emphasis placed on sports, with a drop-down menu that gives you hundreds of options for events. There's also a search bar so you can search by team, event, or even venue. It's a clean website that is simple to use, so you won't have any issues with finding a sports event that interests you. SeatGeek has an app, too, so you can quickly search and purchase tickets when last-minute plans are made. 

You can also sell your tickets on SeatGeek. So, if you can no longer make a sports event, then it's quick to set up an account and help them find a better home. Dynamic pricing means that you can choose your own price to sell at based on the original ticket cost and demand. This is great if you want a little bit more cash for your troubles, but it's something to bear in mind if you're on the buying end, as this does mean prices can soar if it's a highly sought-after event.

The best value sports ticket sites

TickPick has now merged with Razorgator, but it's still packing all of the same great features. The site might initially appear as a being solely for concert tickets, as the homepage shows a lift of trending events that are geared toward music artists. However, there are countless sporting events covered, making it a great place to search for and purchase sports tickets. The chart is interactive, and there are the most filters of any site we tested. You can search by best deal, price, and best seat, to name a few. You can also narrow results even further to 'on aisle', 'wheelchair accessible' and 'elite sellers only', so it's easy to find the exact results that suit your requirements. Tickets can either be physical or electronic, and this is shown right next to the listing.  

TickPick came out on top in our price comparison, during which we analyzed the price of tickets to three events on all of the sports ticket platforms we reviewed and included in our round-up. It had low prices and low fees, which is a huge plus for keeping overall costs down.

While we focused on sports tickets for this review, TickPick also sells concert and theater tickets, so it's a great place for exploring different entertainment options. Another plus of using TickPick is that each ticket is backed by a 100-percent Buyer Guarantee. If an event happens to be postponed or rescheduled, you can use the tickets on the rescheduled date or list them back up for sale. If you opt to resell the ticket, you can select tickets as 'open to bidding,' which is great for making a few extra bucks if the event is in demand. Alternatively, you can select an outright price if you just want to sell the tickets quickly. TickPick will then take a 10-percent commission, which is pretty comparable to other ticket sites.

In terms of customer support, there's an email and urgent support line available, as well as contact via social media.

Sports ticket site FAQs

Super Bowl tickets

We wish you all the luck in the world if you're after some Super Bowl tickets. They're incredibly hard to procure, and when they're available, they're often not the best seats. That being said, you can check Ticketmaster, SeatGeek, or TicketCity if you’re a diehard fan. These websites have them available for thousands of dollars. Season ticket holders, wherever the Super Bowl is played, might sell their spots, so it's also worth checking out websites that resell.

Before game day

After you purchase your tickets, there are other things to consider before you arrive at the game. First, make sure you have the correct ticket method to get in the door. Some websites require you to download an app to present an electronic ticket on your smartphone. If your confirmation email says this, a printed-out receipt or paper ticket won’t work. Other venues may require you to print a paper ticket, so it’s important to make sure you’ve done what’s required before you head to the game. Either way, the ticket purchase confirmation email will give you the information you need.

You should also look up information about security at the stadium you’re going to. Some have metal detectors and don’t allow anything inside that could be used as a weapon. Others don’t have such stringent rules. Either way, knowing ahead of time will make it easier when you arrive. This information most likely won’t be available on the ticket website, so you need to do the research separately.

One last thing to keep in mind is parking. For events at large stadiums, it will most likely be easiest to purchase a parking pass online alongside your ticket. That way, you’re guaranteed a spot. Depending on the location, there may be other parking options, though they could be expensive and not secure. Most sites will sell ticket packages, including parking, so if you're after this, keep an eye out, and you might get lucky.

How we choose the best sports ticket sites for this guide

We spent over 20 hours researching the most popular and most reliable sports ticket websites to ensure we are bringing you the best in class. We considered how transparent their prices and fees are, their return policies, and their buyer and seller guarantees.  

To make the comparison simple to understand, we found the same ticket on each website and noted how much the fees were on top of that. That way, we could give you the exact difference in dollars rather than a rough estimate or confusing percentage. We then took this into account for our final rankings. Sometimes, you might think you're getting a great deal on a cheap ticket until you're shocked at the final checkout page. 

It's important to note, however, that shipping fees sometimes vary by how you choose to receive your ticket. Whether it's shipped in the mail, sent electronically, or even picked up at the event itself. This differs depending on the venue rather than the ticket website. 

Alongside ticket prices and extra fees, we checked to see if the best sports ticket sites have rewards programs, a mobile app, customizable ticket alerts, or interactive seating charts. You can also sell tickets on many of these sites, and some will even buy your tickets directly from you to make life that little bit easier. 

Low resale fees were one of the biggest factors we favored in our search for the best sports ticket sites. Return policies tend to be similar across all the websites - you can't get your money back unless the event is completely canceled. Tickets to rescheduled concerts aren't usually eligible for refunds but there were a select few sites where this is possible.  

We also checked whether each site is intuitive to search through, as well as how easy it is to view different seating options. From our research, we put SeatGeek in our top position thanks to how affordable, interactive, and easy to use the site is. 

Zombie debt is simply debt that you thought was dead and buried but has somehow come back to life.  

If you’re chased for payment of a zombie debt, whether it’s for an old credit card or personal loan, agreeing to pay it might seem like the best solution. But paying a zombie debt can actually make matters more complicated. 

That’s why it’s important to know your rights when it comes to negotiating debt collection, as well as how to deal with this type of debt.  

What is zombie debt?

Zombie debt is debt that has fallen off your credit report, that you no longer owed, but a debt collector is trying to revive. Zombie debt might be revived with new communication from a collection agency or a new debt collection on your credit report. 

There are a few types of debt that can be classed as zombie debt and these include:

• Discharged debts. These are debts that have been discharged in bankruptcy and should not be collected on. 
• Time-barred debts. Aside from federal student loans, most types of debt have a statute of limitations. This varies depending on the state you live in but usually ranges from three to six years. After this time, a debt collector cannot sue you for an unpaid debt – unless you agree to make a payment, in which case the clock can reset. 
• Debts that have fallen off your credit report. Old debt usually falls off your credit report after seven years. However, some zombie debt collectors illegally report old debt as new so that it reappears on your credit report. 
• Debts that aren’t yours. In some cases, you might be asked to pay debt that’s not yours. This can happen if the debt belongs to someone with a similar name, the creditor has made a mistake, or you’re a victim of identity theft.  

How zombie debt works

Creditors often remove old debt from their books and sell it on to debt collectors for less than it originally cost. Although debt collectors cannot take you to court over the debt, they can start contacting you and asking you to pay up. If you agree to do so, the collector will likely earn a decent profit, even if you only pay off a portion of the debt.

Zombie debt collectors, or debt scavengers as they are also called, often use illegal tactics to try and convince you to hand over the money. For instance, they might promise to leave you alone if you make a small payment, or they might tell you that you owe more than you actually do. Some will even step it up a level and threaten to sue you, threaten you with violence or tell you you’re going to jail.

How to protect yourself from zombie debt collectors

Being approached by a zombie debt collector can be confusing and intimidating, but it’s important not to let the collector scare you into paying up. Instead, take a look at the steps below:  

1. Don’t share your personal information 

If a debt collector contacts you, you don’t have to talk to them. But if you decide to, don’t share any information about your income, bank accounts, Social Security number or property you own as this information might be used against you. 

2. Request validation of the debt 

If you receive a collection notice in the mail, you have the right to ask that the collector validates the debt. You can do this by responding with a debt validation letter asking for more information. This will help you determine whether the debt is time-barred and whether it is actually yours.  

3. Research the collection agency

If you know the name of the debt collection agency, investigate the company online. This should help you work out whether people have complained about its debt collection practices before and/or whether it’s the law firm it’s claiming to be. 

4. Tell them to stop 

You also have the right to tell the debt collector to stop contacting you. You’ll need to make this request in writing and send the letter certified mail with a return receipt so you know if the letter has been received. If you request that the collector ceases communication, it must do so in most situations.  

5. Don’t revive the debt 

Whatever you do, don’t admit you owe the debt and don’t agree to pay it. If you never owed the debt in the first place, making a payment can be interpreted as an admission that the debt is yours. 

Even if you agree to make a small payment, the statute of limitations clock could reset and a debt collector could try to sue you for the full debt amount. Be sure to check state laws on this as they vary.

6. Know your rights 

Federal law gives you certain rights when dealing with debt collectors. For example, you cannot legally be sued for a debt that’s past the statute of limitations. It is also worth familiarizing yourself with The Fair Debt Collection Practices Act (FDCPA) as this governs what debt collectors can and cannot do. If a debt collector threatens, harasses or intimidates you into paying up, this is illegal and you must report it to the Federal Trade Commission (FTC) and your state Attorney General’s office. 

7. Check your credit report 

It is also prudent to regularly check all three of your credit reports to see whether a debt collector has illegally reported an old debt to a credit bureau. If that’s the case, you can file a dispute with the credit reporting agency. Regularly checking your report will also help you establish whether you might be a victim of identity theft. 

8. Don’t ignore a lawsuit 

If a debt collector files a lawsuit against you, it is important to respond to it either personally or through your lawyer by the date stated in the court papers. If you don’t, you could forfeit your legal rights. 

9. Speak to an attorney 

Seeking legal advice will ensure you fully understand your options so that you can bury zombie debt for good.  

Few people would ever want to face the question, “should you file for bankruptcy?”, as getting  out of debt can cause a lot of financial and emotional strain. If you’re struggling to pay back what you owe, whether that’s personal loans or credit cards, it is crucial that you look out for the key signs that you may have a debt problem. 

If that’s the case, there are several steps you can take to get out of debt, including seeking the help of the best debt consolidation firms or the best debt settlement companies. However, this won’t be appropriate in all situations and you may need to file for Chapter 7 or Chapter 13 bankruptcy instead. Here’s what you need to know. 

What is bankruptcy?

Bankruptcy is a legal proceeding in which your assets and liabilities are examined by a court. The court will then decide whether to discharge those debts so that you’re no longer legally required to pay them. Or the case could be dismissed if the court believes you have enough assets to pay the bills. 

In Chapter 7 bankruptcy, certain assets are sold to pay off unsecured debts such as personal loans and credit cards. These assets can include real estate (not your primary residence), a second car and valuable collections such as coin and stamp collections. 

In Chapter 13 bankruptcy, you can usually keep your possessions and instead, a more affordable repayment plan is set up with your creditors. This typically spans a three or five-year period and after this time, any remaining unsecured debt is discharged. 

Chapter 11 bankruptcy, meanwhile, is usually for businesses. It gives them the opportunity to stay open while they restructure their debts and assets to repay creditors. 

Reasons to file for bankruptcy

 You might consider filing for bankruptcy if: 

• You have explored other options, including attempting to negotiate with your creditors and establish a repayment plan. If your creditors have not been willing to agree to this, bankruptcy may be your only option. 
• You simply cannot repay your debts. For instance, if the amount you need to pay each month exceeds your monthly income, making it impossible to clear the debt.   

Filing for bankruptcy enables you to start fresh as most or all of your debts will be discharged or forgiven. This also means all phone calls and collection letters from your creditors will stop. However, be aware that some types of debts, including child support, some unpaid taxes, and most student loans, won’t be discharged in bankruptcy. 

What are the consequences of bankruptcy?

The negative consequences of bankruptcy can be significant which is why it’s important to consider this option with care.  

Your credit score will take a hit 

If you have good credit, your score will drop if you file for bankruptcy. A Chapter 7 bankruptcy will remain on your credit report for up to 10 years, while a Chapter 13 bankruptcy will stay on your report for 7 years. During this time, you are unlikely to be able to get new lines of credit, or if you can, you’ll pay significantly higher rates of interest. 

That said, if you already have poor credit, your credit report may improve over time if you manage your debt smartly and rebuild your finances. Some of the best credit repair services could help you restore your credit score, who can deal with creditors on your behalf and offer specialist advice.  

You could even fix your credit score on your own. 

Bankruptcy is a public record 

As well as affecting your credit report, bankruptcy can also affect your personal life. Bankruptcy records are usually a matter of public record which means they can be looked up online. Because of this, bankruptcy can cause difficulties when you apply for a job or if you want to rent an apartment. Your insurance premiums are likely to increase too.

You can lose certain types of property 

If you’re filing for Chapter 7 bankruptcy, many of your assets will be disposed of to pay your creditors. This could include a second home, cash, stocks, bonds, valuable collections or a second car. However, you will be allowed to keep certain assets, known as exempt property, including a portion of the equity in your home and car, and household goods.

How much does bankruptcy cost?

The cost of filing for bankruptcy is usually around $300. However, on top of the filing cost, you will also have to hire an attorney and this can cost considerably more. 

Although you may be able to act on your own behalf without the help of an attorney, doing so is risky and it’s usually best to cover the additional cost. This could be anywhere between $500 and $3,000 if you’re filing for Chapter 7 bankruptcy, but more for Chapter 13 bankruptcy. Fees vary depending on where you live and the complexity of your case. If you can’t afford an attorney, you might be able to benefit from free legal services. 

In addition, you will need to pay around $50 for credit counseling. Fee waivers and reduced rates are available depending on your household income. 

How to file for bankruptcy

To start the bankruptcy process, a petition will need to be filed with the bankruptcy court. This can be filed by an individual, spouses together or by a corporation.

Before you do this, however, you will need to compile your financial records, listing all your debts, assets, income and expenses. This is important as one of the requirements of filing for bankruptcy is that you can demonstrate you are unable to repay your debts.

Another requirement is that you complete credit counseling with a government-approved credit counselor. Credit counselors can help you establish your financial situation, create a budget and explore alternatives to bankruptcy before you proceed. You must complete this step within 180 days before filing. If you don’t, your filing will be rejected. 

At this point, you should hire an attorney if you haven’t already. You will then be ready to file your petition and once it’s accepted, your case will be assigned to a bankruptcy trustee who will set up a meeting with your creditors. You must attend this meeting, but your creditors do not have to. 

Should I declare bankruptcy?

Bankruptcy won’t be the right option for everyone and if you’re considering it, it is vital that you fully understand the consequences it can have before proceeding. It is also well worth speaking to a reputable credit counselor to see whether you can negotiate with your creditors before you take the plunge in case you can avoid bankruptcy altogether.  

Are you dreaming of getting onto the property ladder? Then first things first. Before you start hunting down the best mortgage lenders, you need to save up for that all-important down payment – which, admittedly, isn’t always easy, particularly in the current climate. Then there are the other aspects you’ll need to consider, from sourcing the right mortgage to understanding the housing market. It can all feel a bit overwhelming to the uninitiated. 

There are small steps you can take to start building your savings pot and boosting your knowledge, so here, we take a look at how to save money for a house and prepare for taking that first step on the ladder. All of this will help you on your journey to homeownership.

How much should I save for a down payment?

Your first step is knowing what your end goal is – i.e., how much you're going to need to set aside to afford the house of your dreams. You'll need a sufficient down payment to ensure you're getting the lowest mortgage rates. This means looking at the current market to get a ballpark figure of house prices in your area, and from there, working out how much you'll need to save. 

Ideally, you want to aim for a minimum of 20% of the purchase price. “A 20% down payment will get you the most favorable mortgage rates and eliminate the need to pay for private mortgage insurance (PMI),” explains David Weliver, Founder at Money Under 30. “You can buy a home with as little as 3.5% down, but you’ll be paying much more in interest overall.”

A 20% down payment may seem like a stretch, but it will make homeownership more affordable in the long run, particularly when you consider PMI. PMI is a type of insurance designed to protect the lender if the borrower cannot keep up with the payments. It's a requirement for mortgages where you put less than 20% down. Dr. David Tuyo II, President and CEO of University Credit Union, explains that PMI is calculated as a percentage of the mortgage payments, on average 0.5% to 1.5%, depending on several factors like your credit score, credit history, and the amount of the down payment.

“Essentially, private mortgage insurance is an additional cost that may increase your monthly payments,” Dr. Tuyo said, so this will always need factoring into any calculation. And, when you consider the higher interest rates that are inevitable with a smaller down payment, it’s easy to see how costs can escalate. So, if your budget would struggle under the weight of these extra costs, spending longer saving for a larger down payment at the outset may make more sense. 

“Realistically, if it’s possible, the higher the down payment or savings prior to purchase, the better,” adds Dr. Tuyo. “Generally speaking, if someone can save between 20-30% of the cost of their new home, then they would be approaching the purchase with a healthy financial outlook and be well-prepared to take on the responsibility of homeownership.”

Don’t forget about the other costs that come into play, too. “Remember that unlike renting, there are quite a few variable expenses of homeownership,” says Matt Frankel, CFP, contributing mortgage analyst at The Ascent by The Motley Fool. “Property taxes, homeowners insurance, HOA dues, and maintenance are just a few examples. Be sure to take these into account when setting a reasonable budget.”

Such costs can quickly eat into your house budget, and that's before you even get to things like inspections and the cost of truck rental services for the move itself. Don’t forget to factor these into your initial calculations and add them to your down payment savings to get a more accurate ballpark figure of the total amount you need to save. Being thorough in your research and budget will ensure there won't be any surprise expenses down the line. 

What if I can’t save that much?

Of course, it isn’t always easy to get started, and in many instances, such a significant down payment will be an impossibility. “With home prices skyrocketing over the past year or so, it can seem very difficult to build up enough savings for a down payment,” says Frankel. “Two smart things you can do are finding out the low-down-payment options you can take advantage of, and researching any down payment assistance programs available in your local area.” 

This kind of support can be invaluable, so it’s worth spending time to see what’s out there. The US Department of Housing and Urban Development (HUD) offers several first-time buyer support programs and federal-backed loans. Most lenders have down payment assistance programs in place, too, operating on a state and local level. Taking advantage of such programs could mean you could reach your goal of homeownership far sooner than expected.

There's no need to panic if you learn that you're not eligible for this kind of support and find that you can't put away a 20% down payment. You should still be able to find a mortgage and buy your ideal first home. But be prepared for the monthly costs to be higher when going this route. 

Consider the housing market

It's important to bear in mind the impact that the economic landscape can have on your savings ambitions, too, because the housing market changes rapidly. As Frankel pointed out above, skyrocketing house prices mean that even though you know how much you'll need to save to afford a house, this figure can change in line with broader market fluctuations and the economy as a whole. Staying on top of market changes in your area will help you avoid such shocks.

All this can prove tricky for those relocating to an unfamiliar area. Yet, it also offers unexpected opportunities. The coronavirus pandemic has made remote work increasingly common, leading to many workers looking to move to capitalize on their newfound flexibility. Relocating to a more affordable neighborhood without needing to worry about commuting has never been easier.

You'll also want to weigh the differences between buying and renting. "The fact is that renting can be much cheaper than homeownership, particularly in very expensive cities and popular areas," says Dr. Tuyo. "As a homeowner, there are additional costs to consider that renters do not need to contend with in their monthly payments. Ultimately, these additional costs should be accounted for when comparing renting options against buying opportunities … However, it's a more complicated calculation if you consider the potential return on investment through equity and the increase in value of a home over the years."

Dr. Tuyo adds that once you pass a certain point, the cost of homeownership outweighs those of renting. “Generally speaking, owning a home starts to be less expensive than renting after living in the same home for at least five years,” he says, so even if the initial outlay is a stretch, it could pay off in the long run.

Fix your credit score

Spending time fixing your credit score, particularly if you’ve missed payments or had difficulty securing credit in the past, should be high on the list of priorities for anyone saving for their first home. A better credit score equals a lower mortgage rate and, as a result, lower payments for the life of the loan. 

This is because your credit score is a vital part of lenders’ eligibility criteria. If it isn’t up to scratch, you’ll be facing higher interest rates and repayment plans, and you could even be unable to secure a loan. “An individual’s credit score is used to determine the risk of providing them with a loan,” explains Dr. Tuyo. “Lenders use this to determine how likely it is for you to repay your loan once received and your general financial practices or habits in how you manage debt. Essentially, people with a higher credit score will be seen more favorably and they will be more likely to receive better loan offers with lower interest rates.”

Credit scores aren’t the only element lenders consider, added Dr. Tuyo, but it’s essential to be aware of your score and how it might affect your ability to get a mortgage. As a ballpark figure, if you’re looking for a conventional mortgage loan, you’ll likely need a credit score of at least 620 to be approved by a lender. If yours falls short, it’s time to get busy.

Seeking out credit repair services may be the quickest way to improve your financial health. Many of the best services guarantee to improve your score. They'll rifle through your credit report, spot areas that need attention, and highlight potential errors. They'll even work with credit bureaus to rectify lingering issues, which will help boost your score. Of course, it's possible to fix your credit score yourself. It'll take a bit more work on your part but costs nothing but time.

Figure out which mortgage you can afford

Even if you have your financial goals in order, your credit score has rebounded, and you have an eye on the local housing market, it's important to step back and remember that you need a mortgage you can actually afford. Doing this before you get the ball rolling with mortgage lenders gives you the added security of knowing you won't get in over your head.

“Before purchasing a home, it’s important to work with your lender to see how much buying power you can qualify for based on your debt-to-income ratio and credit,” says Ajani Scott, reality star and real estate agent of Agents of LA. Your debt-to-income (DTI) ratio is key. DTI is a measure of your income against your debt and can indicate how well you’re managing your current credit commitments. A higher score means you could already be struggling and may not be able to afford a mortgage on top of your other obligations. 

You'll need to take a thorough review of your finances so you can see the big picture realistically. Personal finance software can help. It'll give you a general overview of your financial stability and, if it links with your current bank accounts, offer an easy way to keep on top of your budget. Remember to think long-term. Saving for a down payment is only half the battle. You also need to be confident you can make mortgage payments on time, keep up with repairs around your new place, and have an emergency fund at the ready. Buying a new home should not cause you to overstretch yourself or strain your finances.

Dr. Tuyo encourages you to keep things realistic. “Search for a house you can comfortably afford. Your total housing payment should be under 30% of your gross monthly income.” Buying a house you can afford keeps your DTI ratio in check. Remember, lenders use that score to determine your eligibility for credit. Keeping payments under the 30% mark also takes less of a toll on your budget.

“One important point for new homeowners to keep in mind is that banks will typically approve you for more than you should realistically spend,” adds Frankel. “Most lenders will approve buyers with a DTI ratio as high as 45%, based on pre-tax income. But what your lender will approve you for and what you can comfortably pay each month are two different things.” And that is why sticking to the 30% rule is critical. 

Source the best mortgage rates

Dr. Tuyo believes your best chance to get approved for a mortgage is to ready yourself with the following: adequate savings for a down payment, closing costs, and cash reserves; a qualifying credit score; proof of consistent, reliable income for at least two years; and a reasonable debt-to-income ratio. Once you have everything in order, it’s time to find a low-interest mortgage.

Don't be swayed into accepting the first mortgage offered. "One of the biggest rookie mistakes homebuyers make is applying for a mortgage with one lender and simply accepting whatever loan terms they offer," explains Dr. Tuyo. Just as you comparison shop for daily essentials, you should do the same with lenders.

"For one thing, different lenders will offer different mortgage rates to the same borrower," says Dr. Tuyo. "And you might be shocked at how much a seemingly small difference can save you. For example, on a $300,000 30-year mortgage, the difference between interest rates of 3.125% and 3.25% is more than $7,500 over the life of the loan."

Using a website such as Mortgages.net is a simple way to look at all the choices available to you. Slow down your thinking and tame your excitement, too. Rushing into making a decision is never a good idea. Finding the right mortgage for you makes a big difference in your long-term financial health.

“It’s also important to research the eligibility requirements of the lender, the state, and the type of property you wish to buy as there can be differences that you should be aware of,” adds Dr. Tuyo. “Finally, after you are confident with your research and lender that best suits your needs, it is usually best if you can find preapproval on a loan before you actually start shopping for a new home.”

Choose your property wisely

Once you’ve saved your down payment and know where you stand with a mortgage lender, you can start searching for your ideal property. It may take a long time to get to this stage, but doing things the right way will not only yield the home of your dreams but improve your financial outlook.

“Make sure it’s a place you’d like to call home for an extended period of time,” said Dr. Tuyo. “Buy [it] because you want a place to call your own, not as an investment. Don’t stretch yourself too thin thinking you can do something with the equity, or flip it for a quick profit.”

Ajani Scott encourages you to take your time and never feel pressured into buying prematurely. “A rushed decision can lead to resentment, poor choices, and ultimately unhappiness,” she said. “When you are finally ready to purchase, be sure to have long-term and future goals in mind, such as family planning so that you can grow into the home and the rising value of homes in the area so that you may get the best return.”

Reduce your debt

It may seem counterintuitive to pay down your debt when you’re trying to save for a house but bear with me. By reducing your debt load, you’ll lower the amount of money spent on credit and car payments each month, allowing you to put more into your house fund instead. It’ll help your DTI ratio as well. A lower DTI means you’re more likely to be offered a lower mortgage rate, which means paying down your debt will pay off in the long run, too. 

Start by considering which debt to pay off first. Dr. Tuyo recommends paying off debts with the highest interest rates immediately. And if you have several loans or credit cards, consider consolidating all of them into a single loan to streamline your repayment schedule and lower the interest rate. Find the best debt consolidation companies to see if that's a workable option. If consolidation isn't for you, you may want to see if you could refinance your car or personal loan instead. 

Lastly, make sure that you're managing your credit effectively. This helps whip your credit report into shape. You'll want to begin this process early. As Dr. Tuyo explains: "One year out, avoid negative marks on your credit report like late payments or applying for new credit. Big purchases like a car should be made a year before buying a home, and definitely within six months." Applying for any form of credit while house shopping can result in a hit to your credit score, so be sure to avoid large purchases if buying a home is on your near-term agenda.

Make a savings plan

It’s always a good idea to actively look for ways to build your savings, and the best place to start is with a savings plan. How you go about this will depend on your timeframe to purchase a house. 

Let's say that typical homes within your price range are $250,000. If you want to put 20% down, you have to save $50,000. And if your goal is to buy your home within five years, you'll need to put away $833 per month. And that's just for the mortgage. We haven't factored in insurance or any of the other costs with buying a home.  If this seems like too much, you have to adjust your expectations. You'll either need to spend more time saving, opt for a cheaper property, or concede to putting less down at closing.

To guarantee you have enough to live comfortably, you must be realistic about your budget. Set a plan and stick to it, says Dr. Tuyo. “Life can manifest additional costs without warning, but the important thing is to keep making progress towards your goals despite any obstacles along the way.”

Cut your expenses

Once you've cleared out your debt, you'll have extra monthly income to put straight into your savings pot. The next thing on your agenda is to see where you can cut back on your current expenses so you can grow your savings at a faster clip.

One key area all experts agree on is the culling of expenses. You will reach your financial goals sooner by breaking the habit of overspending, especially on things that aren't needed.

Start by looking at your subscriptions to see if any can be cut, and be honest with yourself. When was the last time you went to the gym? Do you really need every streaming service on the market? Are those magazine subscriptions worth it? Try to limit your luxuries, save money on your groceries, downgrade phone plans, and when it's time to renew your various insurances, always shop around to find a cheaper rate.

You could even take this expense-cutting one step further by reducing your current housing costs, either by looking for somewhere cheaper to rent, moving in with friends for a few months to kick-start things, or getting a flatmate to split the rent.  “Do not hesitate to move back in with parents if it’s an option,” says Scott. “Although probably not ideal for most, it can help you reach financial goals much more quickly.”

Get hustling

Along with cutting back expenses, Dr. Tuyo recommends seeking ways to earn additional income. Do you have a hobby that could potentially make money? Do you have enough time for a side job? Whether you want to start selling your wares on Etsy or get set up as a virtual assistant, it could pay off. A survey found that men earned an average of $8,948 per year from their side hustle, while women earned $6,085.

Even easier, sell the belongings you no longer need. You'll make money and will have less to pack and move. A recent survey shows that Americans have netted an average of $1,810 by selling household items online this past year, so it could prove lucrative.

Save smart

Once you get into the swing of things and know how much you can realistically save, make sure to stick to your plan. Dr. Tuyo suggests you "automate your savings and allocate a certain percentage or dollar amount into a savings or money market account every month." Making this simple change guarantees you'll add to your housing fund with every paycheck. You'll likely stash away far more than if you waited until the end of the month to see what's left over. 

You could even step it up a notch by saving as if you were already in your new home. If your future housing costs are likely to be higher than your current rental outgoings, put the difference straight into savings. Not only will you be saving more for your home, but you'll be getting used to the extra expenditure that can come with it.

If you can add anything extra at any point from overtime work or holiday pay, funnel it straight into savings. You should also bank windfall gains like gifts, bonuses, commissions, and the sale of personal assets, says Dr. Tuyo. And if you get a pay raise, put the extra straight into your savings account. You won't notice it if it's not there. And don't forget about your tax refund either! Firing up your tax software and working out what tax deductions you're entitled to can maximize your refund and grow your savings. 

Once you're closer to realizing your goal, it's imperative to change tactics again to maximize your every dollar. "Six months out, you should go into 'cash preservation mode' so you'll be able to afford your down payment yet still have some money left over for additional unexpected expenses that will come with homeownership," said Dr. Tuyo. And don't forget to have an emergency fund throughout the process, giving you accessible cash to fall back on in a pinch.

Find the best savings rates

So, where do you save all this money to get the best returns? For this, you'll need to do some research, and the first place to scout out your options is online. When you find the right bank and couple that with the magic of compounding interest, you’ll reach your goal in record time.

Online banks have traditionally had the best savings rates. Thanks to their low overheads, they're able to pass on savings to their customers. Opting for an online-only savings account will also prevent the temptation of spending the money on other things.

Be on the lookout for banks that offer the ability to siphon off any spare change into a linked savings account – many round-up debit card purchases to the nearest dollar and put the difference into savings. And speaking of debit cards, if you’re able to earn cash back on your spending, consider putting it straight into your savings rather than keeping it in your checking account. The same applies when it comes to cash back credit cards. Every little bit helps. 

Summary

The path to homeownership isn't always easy, but it is always worth the effort. There's nothing quite like getting the keys to your very own slice of real estate! Scrimping and saving can seem like a never ending battle, but there are plenty of small changes you can make that will have a big impact on your goals. The sooner you start, the sooner you'll be able to realize your dreams of homeownership.

Everyone wants to know how to save on electric bills. Let’s face it – electric bills aren’t cheap. According to the U.S. Energy Information Administration, Americans spent almost $1,400 on electricity in 2019, and given that 2020 saw people spend far more time at home than usual in pandemic-induced quarantines, their bills could be even higher. If you’re starting to feel the pinch – or if you’re simply looking for a way to cut your expenses and save some cash – you’re going to want to know how to save on your electric bill. We’ve got a few ideas to help you do that. 

Get in control of your heating 

Heating costs make up a substantial proportion of your energy bill, so it makes sense to start there: getting in control of your thermostat is key. You’ll want to lower the temperature when you’re not in the house, or at night when you can layer up; if you program the thermostat accordingly, you don’t have to worry about forgetting and heating the house unnecessarily, which is a sure-fire way to waste money. Indeed, the US Department of Energy estimates that you could save 1% on your energy bill for each eight-hour period that you lower the thermostat by one degree, so it could pay off. 

Why not make things easy with a smart thermostat? The best programmable thermostats on the market can connect to your WiFi and be controlled via an app, leaving you free to change your home’s temperature settings on the go. Some thermostats turn the heating off when the desired temperature has been reached and others can even track the weather forecast and your energy usage, giving you insights into how you can save money on your energy bills.  

Cool down effectively 

Similar rules apply when it comes to using the air conditioning system – namely, don’t have it running when no one’s around to appreciate it. This means turning it off while you’re out of the house or when you’re sleeping (assuming you can sleep without its cooling effects), or even adjusting the temperature setting. Here, raising the desired temperature by a single degree can save between 4% and 8% on cooling costs. 

Make sure to keep up with the maintenance of your air conditioning system, too. This means you should regularly clean (or replace) the filters: doing so prevents dirt and debris from clogging up the system and improves its efficiency, which in turn can lower its energy consumption. Take time to consider the right air conditioning system for your needs, too. Will a window air conditioner work for your home, maybe a ductless air conditioner, or perhaps you’re in the market for the best central air conditioning units for an efficient way to cool your whole house? The option you pick can make all the difference to your energy consumption, and always make sure it’s got a suitable SEER rating for optimum energy efficiency. 

Alternatively, why not consider one of these best ceiling fans, either as an additional cooling system or to eliminate the need for air conditioning altogether? It may not be suitable in the warmest of climates, but for many, it could cool your home sufficiently without the extra cost.  

Light your way 

We all know that turning the lights off when you leave a room is one of the easiest ways to reduce your energy consumption, but why not go one step further? Consider swapping your lightbulbs for LED or energy-efficient versions – LED bulbs typically use at least 75% less energy than incandescent versions (find out more about how LED lightbulbs work) – and installing dimmer switches. You could even install motion detectors, which will ensure that lights are switched off automatically when no one’s in the room. 

Upgrade your appliances 

If it’s time to upgrade your appliances, you’ll need to consider more than the cost alone – these days, the energy efficiency rating is key. Older appliances typically consume far more energy than their newer counterparts; if you make sure to look for those that have been Energy Star-certified you could easily lower your energy consumption and your bills in the process.  

Be water-conscious 

Thinking about how you use and heat water can also make a difference. Not only can opting for one of the best water heaters have an impact on your bills, particularly if you make sure you’re getting an energy-efficient one, but adjusting the temperature down by a few degrees can help, too. Similarly, you should consider turning it to the lowest setting if you’re going on vacation, so as to reduce energy costs as much as possible.

Be just as thoughtful when you’re using appliances. This means washing your clothes on a cold cycle rather than hot to cut energy use, and if you’ve got a washer-dryer, consider saving the drying cycle for larger items and line-dry the rest. When it comes to washing your dishes, remember that the best dishwashers can actually use less water per load than washing them by hand – particularly if you load it effectively – and consider turning off the heat-dry setting and letting your dishes air-dry instead for maximum energy efficiency.  

Shop around  

Depending on where you live, one of the simplest ways to save on your electric bill could be to find the right energy supplier. You’ll want to compare prices between several different companies because much like with all other purchases, shopping around is key. Make sure to consider the kind of plan they offer, whether they offer fixed or variable rates and their eco-credentials, and don’t be afraid to switch if you find a better deal.  

Every little bit helps 

Don’t forget the smaller tweaks, either. This means checking seals on windows, doors, and appliances to make sure that cold air is staying where it should and that warm air isn’t escaping, and in a similar vein, check the ductwork of your heating, air conditioning, and ventilation systems and repair any leaks to improve efficiency. 

Then there are tips like turning off appliances when not in use – not just leaving them on standby – and even running the dishwasher and washer-dryer overnight rather than during peak hours. Having an efficient, well-insulated home can transform your energy consumption and can ensure you’re not spending over the odds; read more about how to make your home more energy-efficient and see if you can notice the difference in your bills.  

In 2021, people are increasingly opting to renovate or remodel their existing home, instead of trying to find a new one. Making the most of the space you have is essential if you're looking to undertake a home revamp, but knowing how to actually pay for your renovation is absolutely the first thing to consider. This means not only how to cost up the work and finance it, but how to plan for additional costs and surprise work that inevitably forms part of a remodeling of a home.

We recommend starting your journey with a look at the best home design software, to plan out the extent of your renovation and to get a clear picture of how you want things, and roughly how much work this may involve. Following that, you need to work out a budget by getting quotes for each piece of work needed, and then you need to allocate additional funds for emergency work and unexpected issues (these always pop up). After that, when you have a rough total, it's time to work out how to finance the remodel - be it through your own savings, or by borrowing money.

Is using finance for home renovation a good idea?

Whether you should use finance to pay for your home improvements will usually depend on the current state of your finances and scale of the remodel you have in mind. In an ideal world, you will have saved up for your renovation, and have a pot of money that can be used solely for the purpose of delivering your project. Of course, the reality for most is likely to be very different, with unexpected expenses and significant projects making the use of finance in one form or another almost inevitable.    

First, you’ll need to work out whether your idea is realistic given your circumstances. You’ll need to consider the overall cost of the works – according to Remodeling, kitchen renovations can cost in excess of $26,000, and if you’re considering a full master suite extension, you can expect to pay more than $150,000 – and then you’ll need to think realistically about whether or not you can afford it. Do your household finances allow you to commit to making a further monthly payment if that’s what’s needed? Think about how secure you are in your job, whether any other expenses are on the horizon, and perhaps if there are any areas of your spending that can be pared back to help fund your project - the best personal finance software is perfect for helping to figure all of this out. 

If you’re comfortable that you can meet the expense, the second step is to think about whether your plans actually make sense. So will your renovations add enough value to your home to counter what you spend? And will the time and effort you put into remodeling your home be worth it in the long run? Making firm plans is a must, and something that interior design software can help you to achieve if you’re making changes inside, and landscape design software can help with if you’re improving outdoors. 

If your proposed works are extensive, you may also want to think carefully if it is cheaper to renovate your house or move, with the latter being an increasingly appealing option in the post-pandemic landscape. Of course, relocating won’t be a consideration for some, and others will readily spend whatever it takes to achieve their dream home, and find value in the new space they have rather than their property price. Whichever side of the fence you fall, these are all things that should be considered before you start to arrange finance for home renovation. 

How to finance a home renovation

If you’re happy that your home renovation is a viable idea, and that your finances can handle the expense that comes with it, there are a number of home renovation finance options that can potentially help you out. 

1. Home improvement loans

If you don’t want to put your home up as collateral to raise the funds that you need, a home improvement loan is the obvious choice. These unsecured personal loans can be arranged through banks or credit unions, or you can simply search for the best personal loans online. 

How much you can borrow will depend on the provider, but loan amounts of anywhere between $1,000 and $100,000 are generally available. The money can often be in your account within a day, and you’ll have the certainty of knowing precisely what your monthly payments are and how long you’ll be paying the loan back for. 

2. Home equity lines of credit (HELOCs)

If you have equity built up in your home, home equity lines of credit - or HELOCs, for short - are another popular way to finance home improvements. With a HELOC, a pool of funds is made available from which you can draw money as and when you need - this facility makes HELOCs ideal for projects that are difficult to put an exact price to at the start. You’ll only pay interest on what you borrow, and as this is secured against your property, rates are often lower with HELOCs than on personal loans. 

On the other hand, many HELOC rates are variable, meaning what you pay could rise if interest rates start to go the wrong way, and you also run the risk of losing your home should you fail to keep up with the payments that must be made. As you’ll need to have a good chunk of equity in place to be considered for a HELOC, making sure your outstanding mortgage is much lower than what your home is worth is also a must. 

3. Home equity loans

If you've got a fairly good idea how much your renovations will cost, and like the security of knowing what your payments will be, a home equity loan may be right for you. Home equity loans are similar to HELOCs in that you’re tapping into the value stored in your home - the major difference is that you’re taking out a lump sum all in one go, with the value of the loan you’re eligible for dependent on the amount of equity you’ve built up in your property. On the plus side, your payments will be fixed, and so don’t have the potential to rise as they do with a HELOC; when loading up your tax software, it’s worth remembering that the interest payable on a home equity loan used for home renovations is tax-deductible too. 

4. Refinance your mortgage

Low interest rates are helping to make a refinance mortgage a real viable home renovation funding option right now. Replacing your existing mortgage isn’t a decision to be entered into lightly, but for costlier projects, it’s definitely worth approaching the best refinance mortgage companies, particularly if you’ve not refinanced in the past year or so. If you qualify for a much lower interest rate than what you’re paying now, you might even be able to secure the additional loan you’re looking for without seeing too much of a rise in your monthly payments. 

Importantly, you’ll need to take into account all the additional fees that come with refinancing your mortgage, and think carefully if borrowing more means you’ll have to extend the length of your mortgage. 

5. A 0% interest credit card

If it’s only small changes that you’re looking to make to your home, or you’re at the final stages of a remodel and simply need to fund the finishing touches, a credit card might be the best way of securing the funding that you need. With a 0% interest credit card, for instance, you could potentially pay for whatever you need using your card, and avoid paying any interest if you can clear the balance before the interest-free period comes to an end - at the moment, some cards offer 0% terms as long as 18 months. Alternatively, reward credit cards can give decent amounts of cashback or loyalty points if you spend heavily on them.  

The risk with 0% credit cards comes when you fail to pay back what you owe before your grace period expires and high interest rates start to kick in. And if you use an existing card to pay for your spending, on which any introductory period has already expired, remember that you’ll only have the one month to pay it all back before interest starts to build.  

6. Government programs

Before starting out on any renovation, it’s also worth checking whether the Government has a home improvement finance option that could help. A number of options are available, and you’ll always need to ensure you meet the criteria for the various assistance schemes that are provided. 

So if you’ve just bought a home, and don’t yet have any equity to call on as a result, a HUD Title 1 Property Improvement Loan might be able to provide the funding you need to make your property more liveable. For full details of this and other schemes, including the Section 504 Home Repair program and community-based programs, the HUD website is a good place to start. 

Will my credit score come into it?

Any one of the above options could provide the ideal funding solution to turn your home renovation dreams into a reality, but before you take the plunge, it’s important to consider your long-term financial status, with your credit score likely impacting your ability to be accepted for finance – particularly if you’re seeking an unsecured form of credit, such as a personal loan or credit card. In this case, whether or not you’re eligible and the interest rate you’ll pay will depend heavily on your credit score, so getting it up to scratch – either by working to fix it yourself, or by investing in the best credit repair services – could save you a lot on your repayments over the long run. 

However, even if you have bad credit, there’ll still usually be a lender that is happy to oblige. The caveat to this is that the rates will usually be higher and the terms less favorable, but if you’re itching to get started on your home renovation project, there’ll be the options to suit.

Yet if you’re considering using your home as collateral, you may even find that your credit score won’t be such an issue. Given that lenders already have their security in the form of your home, they’re less concerned about your credit history, so opting for a HELOC or home equity loan could be a more viable option for those worried about a potted credit history. That said, it’s still vital to make sure that you’re on a firm financial footing and can keep up with any credit agreement you sign, so looking to improve your financial footprint ahead of applying would be no bad thing, if only for peace of mind.

Debt settlement might be an avenue to explore if you're struggling beneath unmanageable debt and you can't get on top of it. But before diving in to find best debt settlement companies to help you out, there are some big consequences to consider. Particularly when it comes to your credit score. 

Debt settlement is the process of “settling” your debt for less than you currently owe, either agreeing to repay it in a lump sum or through a new (ideally more affordable) repayment plan, or sometimes via a debt discharge. So, how much does debt settlement hurt your credit? Let's take a look... 

What does debt settlement involve? 

The process of debt settlement negotiation is typically conducted via a third party – you can, of course, attempt to negotiate with your creditors yourself, though many find more success if they go through companies that specialize in this area – and you’ll be expected to pay high fees for their service.

It’s by no means the easy option either. Aside from the high costs involved, the process of debt settlement can be prolonged (particularly if you have a lot of creditors or very large debts), during which time you’ll be advised to stop paying the original creditors to encourage them to settle. 

If the settlement is agreed and the amount you owe is reduced, you may also find that you need to pay tax on the forgiven amount, but perhaps the biggest downside to debt settlement is the impact on your credit score. 

Will debt settlement hurt my credit score?

Yes, undoubtedly. Debt settlement can have a significant negative impact on your credit score in two potential ways. The main reason is that the amount you owe won’t be settled in full. Instead, it will be reported to credit bureaus as “paid – settled”, which indicates that you haven’t kept within your original credit agreement to pay back the full amount that was loaned to you. 

This will understandably lead to a dent in your credit score, and will likely make mortgage lenders, credit card providers and the companies behind the best personal loans online wary about lending to you in the future, as you’ve proven yourself to be a credit risk. 

The second potential hit to your score comes from the fact that during the negotiation period, you normally won’t be making payments to your creditors – you’ll be paying into a separate settlement account instead, with the third party making the appropriate payment(s) to settle the debt when an agreement has been reached. 

Again, this will show up on your credit report, with late and missed payments having a direct impact on your score and marking the account as delinquent. 

How can I fix my credit score after settlement?

Any settled account will still stay on your credit report – and therefore be visible to lenders – for seven years, and scores can decline by as much as 100 points (or more) for each settled account. That’s a significant drop, and it could have a huge impact on whether or not you’ll be accepted for credit in the future. That said, settled debts will have less of an impact over time; there are a lot of other factors that go into a credit score, and there are things you can do in order to speed up the process too. 

One of the most important steps is to make absolutely certain that you keep up with all other repayments, and to keep your credit utilization ratio below the magic number of 30%, too. If you can avoid applying for additional credit for a certain length of time that could help by not creating more hard inquiries on your profile, and will have a secondary benefit of keeping your debt-to-income ratio at acceptable levels as well. You may even want to consult the experts to bring your score back up to scratch, which is where the best credit repair services can come in. Yet ultimately you’ll have to wait until the settled account drops off your report, which will always be the point at which your financial status improves the most.

Is reducing my debt burden worth it?

The stark impact on credit profiles means that debt settlement won’t be the right solution for everyone, particularly if you plan to apply for a large amount of credit in the near future. It should only ever be used as a method of last resort once all other options have been exhausted, such as the best debt consolidation companies, or by opting for a personal loan to arrange things yourself. These options won’t reduce the amount you owe, but will have far less of a negative impact on your credit report, so should always be considered. Find out more about debt settlement vs. debt consolidation here.

Yet for some, the chance to reduce your debt burden and head back towards a solid financial footing could be worth the credit score hit. In particular, a case may potentially be made if late payments have rendered your score woefully low already or if debt collection is on the horizon, which could have an even greater impact on credit profiles. Although you should definitely avoid if you have any near-term aspirations to secure finance, the negative effect of settling won’t last forever, either, and it’s possible to return your score to acceptable levels with careful management of your finances. Just be fully aware of all the risks involved and think very carefully is debt settlement worth it for you.   

If you’re looking to get that all-important first mortgage – or perhaps refinance an existing one – knowing where you stand when it comes to loan-to-value (LTV) is vital. But just what is mortgage LTV, and why is it so important?

The LTV of a mortgage refers to the amount you’re borrowing in relation to the value of the property. It’s expressed as a percentage figure and is directly related to the amount you’re able to put as a down payment (or, in the case of a refinance mortgage, the amount you have in equity). The higher the LTV, the higher risk you’re deemed to be, because the lender faces a greater loss should you be unable to repay the loan. 

For example, if you had 30% of the value of the property to put as a down payment, you’d need to take out a mortgage loan of 70% to cover the rest. The LTV is therefore 70%. You can work it out by using the following calculation:

(Amount borrowed ÷ Value of asset) x 100 = LTV

As you repay the loan, the LTV will reduce, because you’ll gradually own more of the property outright and will owe less on your mortgage. This can have a significant impact on your mortgage rate and subsequent repayments, with the LTV having a direct impact on the amount you have to pay. 

Why is LTV important?

The LTV is important because it indicates to lenders how much risk they’ll be taking on, and as such, how high the interest rate will be. While there are several factors that go into how mortgage interest is calculated – including your income, credit score, prevailing market conditions, whether you’re using mortgage points and the term of the loan – it’s your down payment and, subsequently, your LTV, that will arguably be the most important of all. 

This is because most lenders operate risk-based pricing, and will apply higher interest rates to the loans they deem to be the most risky. Given that loans with a higher LTV are typically seen as higher risk, it follows that they’ll come with a higher interest rate. This, really, is why LTV is so important, at least where your budget is concerned – if you have a higher LTV, your loan rate and therefore your repayments will be higher, with lower LTVs typically equating to lower interest rates.

Related to this is the issue of mortgage insurance. Private mortgage insurance, or PMI, is typically required on all conventional loans with an LTV of 80% or above, which can add a significant chunk to your monthly outgoings – and can add up to thousands of dollars over the term of a loan, particularly if it takes several years to hit that magic 80% mark. This form of insurance is there to repay the mortgage if you can’t, and essentially covers the lender against any potential losses should you fail to keep up with your end of the credit agreement. The link between it and the LTV of your mortgage is undeniable. 

While the LTV will be of most importance to lenders when you’re initially taking out the mortgage credit, it can matter throughout the life of the loan as well, particularly if you’re thinking of refinancing and/or want to look for ways to reduce your interest rate. 

What is a 'good' LTV?

A good LTV is typically seen as being 80% or lower. This is the level where lenders begin to view you as lower risk – crucially, it’s also the point at which mortgage insurance can be canceled – and interest rates will typically be lower as a result. For this reason, it’s often advisable for borrowers to get to this level as quickly as possible, as it’s when mortgage borrowing becomes a lot more affordable. The ideal scenario would be to have a low LTV combined with a high credit score, which is when the very best mortgage deals become available to borrowers. 

Yet your combined loan-to-value (CLTV) could also come into it. This ratio includes all secured loans on the property when making the LTV calculation, not just the primary mortgage, and so includes any second mortgages, home equity loans or lines of credit as well. Ideally, you’ll still want to keep the CLTV as low as possible in order to benefit from the best rates, though most lenders will still offer mortgages to those with CLTVs above 80%, provided the borrower has a high credit score, too (if yours has got room for improvement, now could be the time to consider credit repair).  

How can I lower my LTV?

Aside from making a larger down payment and/or choosing a more affordable property at the outset, the best way to lower your LTV is to pay off more of your mortgage balance. This can be achieved either by sticking to your monthly repayment schedule – which over time will see you increase your level of equity and reduce the amount you owe – or by overpaying, if your mortgage agreement and budget allow. 

Yet you could also benefit from house price rises. If it’s been several years since you took out your mortgage loan and house prices have been rising in your area, you may want to consider getting a reappraisal to see what your property is now worth. If it’s risen in value, your level of equity would have increased and therefore your LTV would be lower, which could really pay off if you’re considering refinancing.  

Most of us dread filing our tax return each year. But completing it on time is crucial if you want to ensure any tax refunds or plus-up stimulus payments you’re due get to you as soon as possible and that you avoid failure-to-file penalties.  

Keeping your tax bill as low as possible will no doubt be one of your key goals when filing, and an effective (and completely legal) way to do this is to claim tax deductions. Providing you know what they are and how they work, they could save you a considerable sum of money. 

Using the best tax software can help ensure you make the most of any tax credits and tax deductions you’re entitled to. And by using it alongside the best personal finance software, the process of filing your tax return should also be more palatable.  Here’s how…

What is a tax deduction?

A tax deduction lowers a person’s or organization’s taxable income and this in turn reduces their tax liability. Tax deductions are usually expenses that are incurred throughout the year which can then be subtracted from your income, reducing your taxable income and thus your tax bill. 

There are two main ways to claim tax deductions. You can choose to either take the standard deduction or take itemized deductions. It is not possible to do both.

Standard deduction

The standard deduction is a specified amount that taxpayers can subtract from their income if they are not itemizing deductions. This fixed amount changes each tax year and will depend on your filing status, your age, your spouse’s age and whether you or your spouse are blind. 

In 2021, the standard deduction is:

• $12,550 for single filers and married couples filing separately
• $25,100 for joint filers
• $18,800 for those who are the head of their household

There’s an extra deduction for those who are at least partially blind or at least 65 years old. If this applies to you and you’re also using the single or head of household filing status, the additional standard deduction is $1,700. For those who are married and 65 years or over or blind, the standard deduction is $1,350 higher. The additional deduction amount is doubled for anyone who is both 65 or over and blind. 

Itemized deductions

Itemized deductions allow you to reduce your tax bill by subtracting qualified expenses from your adjusted gross income. In some instances, these will exceed the standard deduction which means you could see a more sizeable reduction in your tax bill. 

You can typically claim itemized deductions in the following categories: 

• Medical and dental expenses: You can deduct medical expenses if they exceed 7.5% of your adjusted gross income for the tax year. This means if you earned $60,000, you wouldn’t be able to deduct the first $4,500.
• Mortgage interest: If you bought a home after December 15, 2017, you can deduct the mortgage interest paid over the past year on the first $750,000 of the mortgage. Married couples filing separately can deduct interest on up to $375,000 each. For mortgages originating before December 16, 2017, the former limit of $1 million applies (or $500,000 for married couples filing separately).
• Charitable donations: Most donations you make can be deducted, provided they are to a 501 (c) (3) organization.
• Student loan interest: If you paid interest on your student loans during the year, you’ll be able to deduct up to $2,500 from your taxable income.
• Gambling loss: The amount of gambling losses you can deduct must not be more than the amount of gambling income you reported on your return. You’ll need to keep a record of all your losses and winnings.
• State and local taxes (SALT): You’re able to deduct up to $10,000 (or $5,000 if you’re married and filing separately) of your state and local property taxes, as well as your state income or sales taxes.
• IRA contributions: Contributions to a traditional Individual Retirement Account (IRA) may be deducted but the amount could be reduced if you or your spouse is covered by a retirement plan at work.
• 401(k) contributions: For 2021, you can contribute up to $19,500 into a 401(k) plan directly from your paycheck without paying tax. This rises to $26,000 if you’re aged 50 or older.
• Home office: If part of your home is used regularly and exclusively for business purposes, you can deduct a portion of your mortgage or rent, utilities, real estate taxes and repairs maintenance.
• Health savings account contributions: You can contribute up to $3,600 in an HSA for self-only coverage and up to $7,200 for family coverage. You can put an extra $1,000 in your HSA if you’re 55 or over. Contributions are tax-deductible, and withdrawals are tax-free too, providing you use them for qualified medical expenses.
• Educator expenses: If you are an eligible educator you can deduct up to $250 of unreimbursed trade or business expenses.

You’ll need to report all itemized deductions on Schedule A of the 1040 tax form. A paper trail will be required to support deductions for certain expenses such as charitable donations and medical expenses.

Which is best for you?

Whether you should choose the standard deduction or itemized deductions will largely depend on your individual circumstances. You’ll need to consider whether the amount you spend on deductions such as mortgage interest and medical expenses exceeds the standard deduction. 

If it does, it will make sense to itemize and claim as you’ll be able to reduce your taxable income by a larger amount. But keep in mind that the process of itemizing is more time-consuming, and you’ll need to prove that you’re entitled to the deductions. 

If, on the other hand, your itemized deductions are less than the standard deduction, you’ll save both money and time by taking the standard deduction. 

What’s the difference between tax deductions and tax credits?

Tax deductions should not be confused with tax credits. A tax credit is an amount of money that you can subtract directly from taxes owed to the government. So, whereas a tax deduction reduces the amount of taxable income, a tax credit reduces the amount of tax owed.

Tax credits can include child tax credit, Lifetime Learning Credit, and American Opportunity Tax Credit.

What is the difference between tax evasion and tax avoidance? While no-one likes paying taxes, it's crucial to understand the difference between “tax avoidance” and “tax evasion”. Knowing where you fall on the tax avoidance vs tax evasion scale can mean the difference between making your money work hard, and you falling on the wrong side of the law. 

Although both terms might have negative connotations, one of them is actually a perfectly legal practice and is employed by many wealthy people and companies with substantial assets, along with everyday Americans who are smart with money and want it to work harder for them. The other, however, is not and could result in large fines or even jail time. Here’s how they differ…

What’s the difference between tax avoidance and tax evasion? 

Tax avoidance is defined as taking legal steps to reduce your tax bill, whether that’s taxable income or tax owed. You might do this by claiming tax credits, for example, or investing in tax-advantaged Individual Retirement Accounts (IRAs) or 401(k) plans. Having tax software can help you manage stuff like this, legally. 

Tax evasion, on the other hand, is when illegal tactics are used to avoid paying taxes, such as hiding or misrepresenting income, or intentionally underpaying taxes. The consequences of tax evasion can be serious. 

Examples of tax avoidance

Some common examples of tax avoidance include:

• Contributing to tax-advantaged IRAs and 401(k) plans. Both of these grow tax-free which means there is no tax to pay on interest earned. Distributions and withdrawals will usually be taxed at your then-income tax rate in retirement.
• Taking legitimate tax deductions, such as those for mortgage interest, child tax credit, medical expenses, student loan interest, and charitable contributions. 
• Claiming tax credits offered by the IRS.
• Deducting business expenses to reduce taxable income.

Examples of tax evasion

The examples below are all classed as tax evasion and are therefore illegal:

• Deliberately under-reporting income – the most common cases include those who run cash businesses and keep their true income under wraps. 
• Hiding or transferring assets.
• Hiding interest, such as that from offshore accounts.
• Deliberately underpaying taxes.
• Claiming personal expenses as business expenses – this can be easy to do if you use a computer for both personal and business reasons, for example.
• Keeping two sets of books.
• Making false entries in books and records.
• Claiming false deductions with no documents to support them.

What are the penalties for tax evasion?

The penalties for tax evasion can be severe. However, if it’s clear that a taxpayer has made a mistake and has not intentionally become a tax evader, this will be considered negligence (although you may still be sent a notice of penalties and interest due from the IRS).

If, on the other hand, it was your intention to evade taxes, you could face the following penalties:

• Fines: The IRS could fine you up to $250,000 if you act with the purpose of evading tax. Corporations will be charged double.
• Interest charges: If you don’t pay your taxes on time, the IRS is required by law to charge interest. This accrues from the due date of your tax return until you pay the full amount owed, including penalties and interest charges.
• Criminal charges: You’ll be prosecuted in federal court if you are charged with tax evasion and a felony charge will stay on your record for life.
• A prison sentence: You could go to federal prison for up to five years if you’re found guilty of tax evasion.
• Tax lien on your property: The federal government can place a tax lien against your property in an attempt to recover the cost. Tax liens can stay on your credit report for seven years, or indefinitely if the lien is unpaid. Derogatory marks such as these can have a negative impact on your credit score and make it harder for you to get credit in the future.

Even if you’re not formally charged with tax evasion, you can be fined by the IRS if you don’t file your tax return on time, or you file your return but don’t pay your taxes.

• The failure-to-file penalty is 5% of your unpaid taxes for each month your tax return is late, up to five months. If you are more than 60 days late, the maximum penalty will be the lesser of two amounts: 100% of the unpaid taxes or a “specific dollar amount that is adjusted annually for inflation,” according to the IRS.
• The failure-to-pay penalty is 0.5% for each month the tax is not paid in full, up to a maximum of 25%.

American taxpayers who are unable to pay the taxes they owe in full by the deadline are advised to still file their tax returns on time as the failure-to-file penalty is often greater than the failure-to-pay penalty. 

You should also keep in mind that the majority of filers will qualify for a refund and this can often be several thousands of dollars. It’s therefore worth giving some thought to what you’ll do with any refunds you’re due, such as considering online stock trading to see if you can make your money go further.   

How to avoid tax evasion charges

To ensure you don’t end up being charged with tax evasion, it’s crucial that you understand the tax laws for both income taxes and employment taxes and recognize what tax deductions are legitimate. 

Taking the time to keep full records of all income and expenses will also be beneficial when it comes to filing your tax return. You could do this by taking advantage of the best personal finance software, for example, which will directly sync to your bank and credit accounts to give you an accurate overview of your financial situation whenever you need it. This can prevent you from blurring the lines between personal and business-related expenses. 

Similarly, the best tax software can provide you with all the tools you need to help you get the most out of any tax credits and deductions and can help you find ways to legally avoid paying tax. 

If you have any questions about what is classed as tax evasion and what is tax avoidance, it’s best to speak to a tax expert who will help ensure you don’t accidentally cross into illegal territory. 

Do you have a will? More than two-thirds of Americans don’t. Many believe they do not have enough assets to leave anyone, others simply haven’t gotten around to it, and others still say a will is too expensive to set up.

But no matter how much or how little you own – or even how uncomfortable the idea of writing a will makes you feel – there are many reasons why you should make a will, and it doesn’t have to cost hundreds of dollars either. 

Most importantly, creating a will ensures your estate will distributed according to your wishes and that your family do not have to waste extra time, money and energy settling your affairs. Should you die without a will – known as dying intestate – state law will govern who gets your property and assets and this could result in loved ones missing out. 

How to write a will for free

Hiring a lawyer to write your will is likely to be the most sensible option if your affairs are complex, as this will ensure everything has been considered correctly and will minimize the risk of mistakes. 

However, if your financials are straightforward and you are confident you don’t need an advisor’s help deciding how your assets will be divided, you could save yourself hundreds of dollars on lawyer fees by drafting your own will for free. 

Thanks to the internet, it is now easier than ever to strike out on your own and create a will, so here’s how to go about it…

1. Find an online will maker
The first step is to find the best online will maker as this will provide all the tools you need to outline your wishes from the comfort of your own home. A number of these packages won’t charge you a cent to use them, so take a look and compare your options. 

Online will makers are generally easy to navigate and drafting your will can be completed in as little as 15 minutes – potentially less if your affairs are particularly straightforward. Step-by-step instructions will guide you through the process to ensure you create a will that is legitimate and, should you later need to alter your wishes, you’ll usually be able do so at no additional expense. 

2. Decide how to divide your estate
When creating your will, it’s crucial that you are as clear as possible about how you want your assets to be passed on. Your significant assets should include real estate and land, jewelry, cars, artwork and bank accounts. 

To reduce the risk of confusion, always use full, legal names of beneficiaries and consider naming a secondary beneficiary for each asset in the event you outlive the first. 

3. Propose guardians for your children
The names and birth dates of any children you have should be listed in your will. You should also nominate a legal guardian who will look after them if you die while they are young – this will prevent the court making the decision on your behalf. Again, it can be wise to choose a secondary guardian in case you outlive the first.  

4. Choose an executor
An executor is the person you nominate to deal with your estate when you pass away. It’s important that this is someone you trust as they might have to pay off bills, close financial accounts and notify banks and other financial organizations. There’s no reason why you can’t have more than one executor.

5. Name a “residual beneficiary”
Once the executor has fully distributed your assets and paid bills, debts and taxes, anything left over in your estate can be passed on to the “residual beneficiary”. This can be someone who has already benefited from your will, someone new, or a charity.

6. Keep your will safe
Once your will has been finalized, your will maker software will usually give you the option to download and print a hard copy of the document. You must keep this in a secure place, such as a safe deposit box, locked filing cabinet, or fireproof and waterproof metal box or home safe. 

Be sure to tell your executor where to find the original document and you may want to give him or her a copy too. 

Making sure your will is valid

Creating an online will is just as legal as a will drafted by a legal professional, providing it meets all the requirements of the state where it is executed. This means it’s crucial that you check the rules specific to the state where you live. In some states it is legal to create handwritten or “holographic” wills, for example, while in others it is not.

Your will must also include your own signature, as well as the signatures of at least two witnesses (some states require three). Each witness must be at least 18 years old and should not be beneficiaries of your estate – this usually includes a beneficiary’s spouse. 

Providing your will is created properly and witnessed, it does not need to be notarized if judged valid in court. However, to prevent delays in distributing your estate, it can be sensible to include a self-proving affidavit in most states. This is a short note that is taken as immediate proof of the will.   

Further protection for your loved ones

Making a will is crucial if you want your estate to be passed on according to your wishes. However, it is just one part of ensuring your loved ones’ financial future will be protected if you are no longer around. 

It is also prudent to consider the best final expense insurance to ensure your family will not be burdened with the cost of your funeral and burial. And choosing the best life insurance policy will give peace of mind that your loved ones will be financially secure if you were no longer there to provide for them.

If you’re planning to take advantage of the current low rate environment by either buying your first home or refinancing, one of the biggest mortgage decisions you will need to make is whether you want a 15-year loan or a 30-year one. 

Mortgage lenders and the best refinance mortgage companies will offer both of these options and both will provide a fixed monthly payment over several years. But each has its own benefits and drawbacks, and it’s important to evaluate these in full before making your choice.   

What’s the difference between a 15-year mortgage and a 30-year mortgage?

The main – and most obvious – difference between a 15-year mortgage and a 30-year mortgage is the length of term. With a 15-year mortgage, you’ll have 15 years in which to pay down the amount borrowed, while a 30-year mortgage gives you twice as long to repay the loan.

Most 15-year and 30-year mortgages are fixed rate deals, which means the interest rate won’t change for the duration of the loan. However, the amount of interest you pay overall can vary considerably depending on the mortgage you choose. 

Advantages of a 15-year mortgage

Perhaps the biggest advantage of a 15-year mortgage is the amount you could save on interest – potentially thousands of dollars. There are two key reasons for this. First, interest rates are usually lower compared to 30-year loans, and second, you’ll be paying down your mortgage over a shorter period of time, so the amount of interest you pay in total will be much less. 

Another benefit is that you will pay off the full amount borrowed in half the time compared to a 30-year mortgage, which means you’ll own your home outright much quicker.

A 15-year mortgage also allows you to build equity in your home at a faster rate. Equity is the portion of the property you actually own and is the difference between what you owe on your mortgage and what your home is currently worth. Building equity faster means you may be able to tap into that equity by refinancing, allowing you to pay for major home renovations or school fees, for example. 

Disadvantages of a 15-year mortgage

Of course, there are also drawbacks to a 15-year mortgage. Crucially, because you are paying down your mortgage over a shorter period of time, your monthly repayments will be significantly higher. So while this enables you to be mortgage-free more quickly, if you can’t afford the monthly payments, a 15-year mortgage is best avoided.

Remember that your monthly payment is not the only cost associated with refinancing or getting your first mortgage. There will be closing costs to factor in too, including appraisal fees, home inspection fees, application fees and insurance costs, to name a few. 

Advantages of a 30-year mortgage

A 30-year loan tends to be the most popular choice for American homebuyers, primarily because the lower monthly payments on offer make it a more affordable option. Lower monthly payments can also provide the opportunity to build up savings or even buy a larger home than would have been possible with a 15-year mortgage. 

Another advantage is that 30-year mortgages can be more flexible. If you choose a mortgage without prepayment penalties, you’ll have the option to increase your payments on your own schedule. This means the best mortgage lenders will allow you to pay off the principal balance earlier than you agreed to, without the need to commit to a shorter term. 

Disadvantages of a 30-year mortgage

The biggest drawback to a 30-year mortgage is that it will take you twice as long to own your property outright and you could potentially pay thousands of dollars more in interest during that period. 

As mentioned above, interest rates are generally higher compared to 15-year mortgages, and you’ll be paying interest over 30 years rather than 15.

How interest affects your total mortgage cost

If you know how mortgage interest is calculated and the different rates available to you, it's possible to do some calculations. Let’s say you’re borrowing $150,000. A 15-year fixed rate mortgage might offer you an interest rate of 2.47%, while a 30-year fixed rate mortgage might offer 3.31%. 

Applying these rates to a few calculations, the 15-year mortgage would have a monthly payment of $998 for principal and interest, while the total amount of interest over the life of the loan would come to $29,677.

In comparison, the 30-year loan would offer lower monthly payments of $658 for principal and interest, but the total interest paid would be significantly higher at $86,854 - over $57,000 more than the 15-year loan.

Even if we applied the 2.47% rate we’ve used for the 15-year mortgage to the 30-year loan, the monthly payment for principal and interest would be $591, while the total interest over the life of the loan would be $62,580 – still more than double that of the 30-year loan.

Which is best for you?

The best way to make a decision about which loan length is right for you is to calculate how much you can afford to pay towards your mortgage each month. If you can comfortably afford higher payments, you may favor a 15-year mortgage which will allow you to own your home outright more quickly.

If your budget won’t stretch that far, however, or you’d prefer to be able to put more money away into savings, a 30-year mortgage will likely be the better choice. Choosing a mortgage with no prepayment penalties could be a good compromise as it offers the flexibility to pay more when you can afford to, without the formal commitment. 

Remember that lenders will scrutinize your finances when you apply for a mortgage - knowing the difference between prequalfication and preapproval is a must - so even if you feel comfortable with your payments, you could still be turned away if your lender is not satisfied you could afford the loan. Taking the time to improve your credit score and ensuring your debt-to-income ratio is good could increase your chances of getting accepted for your preferred mortgage.

American taxpayers are being reminded to check for common tax return errors as the filing deadline of May 17 draws near. The IRS has warned that making a mistake on your tax return is likely to affect how quickly your return is processed and can lead to a delay in the issue of tax refunds. 

Given the impact of COVID-19, more taxpayers than usual are relying on a refund to boost their household finances - and that makes avoiding these frequent mistakes more important than ever. Here’s 10 ways to reduce the chances of a tax return slip that could see your money held up at the IRS longer than usual. 

File online

Doing away with paper returns and filing online, whether using Free File on the IRS site or alternative e-file providers, can both reduce the likelihood of making a mistake and help ensure you get the biggest deductions to minimise the amount of tax you must pay. The best tax software automatically applies the latest tax legislation, flags all of the credits or deductions that could apply to you, works it all out, and makes clear all of the information you need to supply.

Report everything  

In order to avoid fines and interest penalties, make sure you report all of your taxable income when filing. Having the relevant income documents to hand - such as Forms W-2, 1099-MISC or 1099-NEC - before beginning to file should help avoid any omissions and you underreporting. If you use personal finance software, perhaps this can help avoid omissions too. 

Check names and Social Security numbers 

It may sound obvious, but always double check that you’ve entered each Social Security number (SSN) and individual's name on your tax return exactly as they are shown on the Social Security card. As normal practice, you must list the SSN of any person you claim as a dependent - if they or a spouse doesn’t have or isn’t eligible to get a SSN, you should note down the Individual Tax Identification Number (ITIN) instead.

Check your filing status

If you’re uncertain about your filing status, use the IRS Interactive Tax Assistant to get it right - this is particularly important if you could fall into more than one status. 

Pay attention over virtual currency  

If you’ve moved on from the best forex brokers, and gone virtual, then this is for you. With this year’s Form 1040 querying whether you’ve “sold, sent, exchanged or otherwise acquired any financial interest” in any virtual currency during 2020, note that if your only involvement was to buy virtual currency last year, then you do not have to answer "yes" to this question.

Use the right address

If filing online isn’t an option, and you need to complete a paper return, always make sure you’re mailing your return to the correct address if you want to avoid any extra delays on top of the slower processing you’re likely to experience anyway. You can find the right address on the IRS website or on the form itself. 

Check your bank details

You’ll get your refund faster if you ask the IRS to forward your money by direct deposit...but only if the routing and account numbers you share when you file are correct. Get a digit wrong, and your money could end up in someone else’s online bank account. 

Sign and date 

A particularly important reminder for joint filers is that both spouses need to sign and date where requested. If you e-file, it’s possible to sign using a self-selected personal identification number (PIN) too.

Make a copy

Just in case something goes missing, or there’s a query that you need to check, make sure you take a copy of your signed return and documents and keep them somewhere safe.

Need more time? 

If you’re struggling to meet the May 17 cut off, and need more time to file, you can always request an extension to October 15. But while this means you should avoid falling foul of late filing penalties, remember you’ll still need to make your tax payments by May 17. 

If you’re hoping to get on the property ladder and have found your ideal home, securing a mortgage is probably near the top of your list of things to do. But the first step to buying a home isn’t finding the best mortgage lenders – it’s finding out your credit score, and whether or not you need to improve it before you’ll be approved as a borrower. So before you book the truck rental, you’ll need to know what credit score is needed to buy a house, and what you can do if yours isn’t up to scratch. 

What should your credit score be to buy a house?

The minimum credit score you’ll need will depend on the kind of mortgage you’re looking for, though lenders may have additional criteria that you’ll need to pass in order to be approved. That said, here’s a look at what you can expect:

FHA loans
If you’re looking for a loan that’s insured by the Federal Housing Administration, you’ll need a minimum score of 500 – though you’ll need to put up a 10% down payment. If you can only put down 3.5%, you’ll need a higher score of 580 to qualify. 

VA loans
Loans that are insured by the US Department of Veterans Affairs don’t have a minimum credit score requirement, though lenders that offer such loans will typically expect a score of at least 620.

USDA loans
These loans, which are designed for those looking to buy homes in rural areas and are backed by the US Department of Agriculture, typically require a minimum credit score of 640 (lower scores may be approved, but will require manual underwriting). 

Conventional loans
If you’re looking for a traditional mortgage (i.e. one that isn’t backed by a government agency) you can expect a minimum credit score requirement of 620.

Jumbo loans
If you’re looking for a mortgage that exceeds Freddie Mac and Fannie Mae lending limits, credit scoring criteria will be higher accordingly, with the minimum score needed typically around 700.

Why do credit scores matter?

Credit scores give lenders an instant indication of your credit worthiness, and how risky you are as a borrower. The lower your score, the higher risk you’re deemed to be, which can lead to less favorable mortgage terms and higher interest rates – and subsequently, higher repayments. This means your credit score will not only dictate whether or not you’ll be accepted for a loan, but also how much you’ll be expected to pay each month, which can be a vital consideration when determining the kind of mortgage you can afford. 

For example, if you wanted a $240,000 loan over a 30-year term and qualified for a 3.5% mortgage rate, you’d pay $1,077 each month (excluding insurances and property taxes, and after making a 20% down payment), with the amount of interest paid over the term of the mortgage totalling $147,974. 

Conversely, if you had a lower credit score and only qualified for a 5% interest rate, your monthly payment would increase to $1,288, which would also see the total amount of interest you’d pay over the life of the loan skyrocket to $223,814. This equates to an increase of over $75,000, so having a less-than-perfect score can seriously cost you.  

Can I get a mortgage with bad credit?

It depends how low your credit score is. Provided your score is above 500 you may qualify for certain types of loan, though if it’s below this level, you could find it tricky to be accepted, as lenders will be less confident that you’ll be able to repay the loan. That said, there are many factors that will go into a lender’s decision-making process – such as your debt-to-income ratio, cash reserves, income and employment history, together with the amount of down payment you’re offering – but if you’ve got bad credit, it’s always worth trying to improve it before you start the application process. 

How can I improve my credit score?

The first thing you’ll want to do is check your report so you know where you stand - you can do this for free at AnnualCreditReport.com - and if you notice any errors, you’ll want to dispute them. However, it may simply be that you need to work on your credit management, in which case you’ll want to focus on paying down your debt to improve your credit utilization ratio, and always pay bills on time to ensure you don’t get any marks on your profile. Try to avoid making any other credit applications in the months before applying for a mortgage, as multiple credit inquiries can have a negative effect on your report, albeit a temporary one. 

While it’s possible to improve your credit score yourself, you may want to seek the best credit repair services to help. Doing so can be one of the best ways to fix your score fast, particularly if you’re not sure why you’ve got bad credit in the first place, as the professionals will be able to look for any anomalies on your report, check for derogatory marks and get any errors expunged. 

Credit scores and the coronavirus crisis

People’s finances have come under extra scrutiny in the last year as a direct result of the coronavirus pandemic, with lenders becoming increasingly cautious in who they lend to as well. This, combined with the rush in refinancing brought about by favorable mortgage rates, means that the typical credit score among borrowers who qualify for a mortgage has increased, with the average sitting at a two-decade high of 786 in both the third and fourth quarters of 2020. 

Yet it’s important to remember that this is just an average; as discussed above, the credit scoring criteria for many mortgage lenders is below this level, though it remains the case that the higher your score, the better your chances of approval – and the better terms you’ll likely qualify for. Whether you’re buying a new home or searching for the best refinance mortgage, it’s always worth spending the time to make sure your score is the best it can be.

American consumers have been reminded of the potential hazards of “buy now, pay later” financing after 2 in 3 shoppers said such loan agreements had led to them spending more on a purchase than they intended. 

A new LendingTree survey also found that around 7 in 10 buy now, pay later users had ended up being charged interest or fees for missed payments, as the impulsiveness of their purchases caught up with them. 

What are people buying? 

Commonly advertised at checkouts when shopping online and in-store, buy now, pay later finance allows shoppers to spread the cost of significant purchases into multiple smaller payments through a loan or instalment agreement. When used sensibly, buy now, pay later can prove extremely useful in allowing people to buy the essential items that they need - such as when buying a refrigerator on finance or getting a new mattress on finance - if they don’t have all of the funds required immediately to hand. 

Worryingly, however, the survey found that more than 1 in 3 people are now using buy now, pay later to cover the cost of discretionary purchases and luxury spending that they normally wouldn’t be able to afford. Clothing (38%), shoes (34%) and jewelry (29%) currently the top items that Americans are buying in this way, while nearly 70% of those who have used a buy now, pay later service admitted doing so to purchase a designer item.

Generation gap 

Perhaps unsurprisingly, buy now, pay later is most popular among younger shoppers, with 59% of Gen Z shoppers (ages 18 to 24) and 47% of millennials (ages 25 to 40) having used this type of finance, compared with just 28% of Gen X shoppers (ages 41 to 55) and 9% of baby boomers (ages 56 to 75).

Noting that younger consumers are less likely to view buy now, pay later agreements as a form of debt, and are also more leery of using credit cards, LendingTree Chief Credit Analyst Matt Schulz isn’t shocked by the differing generational attitudes to such arrangements, but warns: 

“We’ve seen that people tend to overspend with these loans, and Gen Z and millennials are likely to have far smaller financial margins for error than Gen X and boomers, so they’re taking a bit more of a risk.”

Is buy now, pay later a good idea?

As already mentioned, buy now, pay later finance can be a good payment option if thought about carefully and managed properly. As with any type of loan, that means being fully aware of the terms you are entering into and the interest rate that you’ll pay. That way, you’ll also be able to make an informed judgement on whether the payments you’ll need to make are affordable, and won’t leave you requiring the services of the best debt consolidation companies in six months’ time. 

Unfortunately, 31% of those surveyed who entered a buy now, pay later agreement didn’t know what the interest rate and fees would be before agreeing to finance their purchase, and 1 in 10 are still completely unaware of their interest rate even as they’re making payments.

Unsurprisingly, the majority of shoppers who use buy now, pay later financing therefore currently end up being penalised in some way, with 31% being charged a late fee, 23% being charged interest, and 18% being charged both at some point in the past. What a lot of people also fail to realise is that many buy now, pay later loans must be repaid every two weeks rather than once a month, which makes it easier to miss payments.

Knowing the interest rate you’re being asked to pay will also help you compare with other lending options such as the best personal loans online. According to the survey, 12% of buy now, pay later borrowers enjoyed a 0% interest rate deal, and 18% paid less than 10%. However, a quarter (25%) of users admitted they had signed up to a deal charging 10-15%, and a further 20% were paying 15-20%. At the very highest end, and being charged rates far beyond typical loan terms, 8% paid 20-25%, and 7% were paying 25% or more.   

American taxpayers have been told they should still file their tax returns on time even if they can’t pay the taxes that they owe in full by the May 17 deadline.

In a special reminder, the IRS said individual taxpayers unable to raise all of the funds they need to meet their tax obligations should either file or request an extension of time to file by May 17 if they want to avoid a failure-to-file penalty. It was also reminded that an extension of time to file - which can be granted until October 15 - is not an extension of time to pay taxes, which will be due May 17 regardless. 

To get an extension, you must either file Form 4868 through your tax professional, the tax software you use, or by using Free File on IRS.gov. Alternatively, you can select Form 4868 when you submit an electronic payment. 

If you don’t think you’ll be able to pay all of your taxes by May 17, the advice is to pay what you can, but to be aware that a failure-to-pay penalty is likely to come your way. Also, you shouldn’t just let the situation slide; instead, it’s better to contact the IRS to find out about the payment plan options that are available. 

Plus-up payments continue

The reminder comes as the IRS confirmed a further 700,000 plus-up stimulus payments have been issued in the past week. The payments are being made people who have recently filed and, as a result, the IRS has determined are owed more money than they've been paid under the third stimulus check. Extra funds may be due if your income has changed in the past year, perhaps due to job loss or change, or your family has welcomed a new arrival. 

In a similar vein, the IRS has confirmed that taxpayers who fell out of work last year, and have already completed their tax returns, are set to get an automatic refund from the IRS on their unemployment benefits.

The agency says it is taking steps to automatically return money this spring and summer to those who filed reporting unemployment compensation ahead of the recent changes made under the American Rescue Plan. The relief package, signed by President Biden on March 11, allows eligible taxpayers who earned up to $150,000 in modified adjusted gross income to exclude up to $10,200 of unemployment compensation. For those that are married and file jointly, the stimulus tax break doubles to $20,400 of the unemployment benefit received. 

Even though the tax deadline has been extended to May 17, the amendment to the rules comes after millions will have already filed their taxes, for whom the IRS says it will make the appropriate change to their returns. If a refund is due as a result, these payments will begin to be disbursed in May, and then continue throughout the summer, or will be applied to any taxes that might be owed.

Should you file an amended return? 

According to the IRS, there should be no requirement to file an amended tax return UNLESS the recalculations result in someone becoming newly eligible for additional federal credits and deductions that are not already on their first return.

“For example, the IRS can adjust returns for those taxpayers who claimed the Earned Income Tax Credit (EITC) and, because the exclusion changed the income level, may now be eligible for an increase in the EITC amount which may result in a larger refund,” the agency explains. “However, taxpayers would have to file an amended return if they did not originally claim the EITC or other credits but now are eligible because the exclusion changed their income.”

Those affected in this way are also being advised to review their state tax returns as well. The IRS says it has also been working with the companies that deliver tax software packages to make sure the changes are reflected in the questions asked of those who prepare their tax returns electronically.

IRA contribution deadline extended 

The IRS has also announced that taxpayers now have until May 17 for making contributions to individual retirement accounts (IRAs) and health savings accounts (HSAs), and have more time to claim tax refunds for the tax year 2017. 

Contributions into both IRAs and HSAs have the potential to be tax deductible, giving taxpayers another opportunity to claw money back from the tax service. Just a few days’ ago, the agency revealed that people now have the opportunity to claim a deduction on the COVID-related personal protection equipment they’ve been buying.  

Unclaimed 2017 tax refunds 

At the same time, the IRS confirmed that anyone who is yet to claim their refund for the tax year 2017 has also been given until May 17, rather than the normal April 15 deadline, to request the money that they may be owed. It's estimated that Americans will miss out on $1.3bn in 2017-related refunds if they don't act before that date. 

Legally, taxpayers have a three-year window of opportunity to claim a refund. If a stake on that money is not made within that period, it becomes property of the U.S. Treasury. Anyone needing to file a prior year tax return to claim these funds has been told they must properly address, mail and ensure their return is postmarked by the May 17, 2021, date.

Reasons to file your taxes online

Those who are urgently waiting on their tax refunds have also recently been given 12 million reasons why it’s better to file your taxes online. That’s the number of paper tax returns that were backlogged at the Internal Revenue Service (IRS) as of the end of last year, according to a new Treasury Inspector General for Tax Administration report. As a result, there’s likely to be many taxpayers who are still yet to receive a refund for last year’s filing season.  

Unsurprisingly, it is the fallout from the coronavirus pandemic that has been hampering the IRS’ efforts the most. When people file online, it’s far easier for the IRS to rubber stamp refunds than processing paper returns which is not something that can be easily completed by employees working remotely. 

“In 2020, the IRS found itself in uncharted waters, as did the entire nation,” Kenneth Corbin, commissioner of the wage and investment division at the IRS, wrote in reply to the report. “The IRS’ top priority during the COVID-19 outbreak was, and continues to be, protecting the health and safety of taxpayers and the IRS workforce. For that reason, we temporarily scaled back operations, taking such steps as closing our Submission Processing Centers and Taxpayer Assistance Centers, discontinuing face-to-face operations and suspending our telephone helplines.”

Paper jam at the IRS

The volume of paper returns caught in the system represents a huge jump on the 183,000 that were backlogged at the end of 2019. At the same time, the IRS has had to introduce new processes and find the resources to deliver the stimulus payments that have been sent to Americans in light of the pandemic. The third stimulus check is in the process of being distributed now, with some 161 million payments having been sent at the last count. 

With staffing numbers already stretched, and the extra responsibility of getting relief payments to Americans a priority, the IRS’ ability to address the backlog that has been built up will be hampered further still. In turn, this inevitably means some people will experience a longer-than-usual delay in getting their tax refund, and their stimulus payments. The agency has already extended the tax season to give filers more time to get their finances in order, and, according to Corbin, has sought authority to hire more staff to alleviate the bottlenecks in the system. 

“We are hopeful the benefits of electronic filing have been reinforced with the public and that the experience of 2020 encourages traditional paper return filers to convert to electronic filing,” he added in his response to the report. 

Navigating tax season 2021

Even before the backlog came to light, the overwhelming advice for tax season 2021 has been to file taxes online if you want your refund fast. Although the IRS issues a similar message every tax season, the challenges created by the pandemic means it still cannot be reiterated strongly enough. 

Choosing the direct deposit option to receive your funds, rather than a mailed check, will ensure a safer and speedier transfer of money too. All told, the IRS predicts it will process more than 160 million tax returns this year, with nine out of ten returns being filed electronically. But while around eight out of ten taxpayers are expected to receive their refunds straight into their bank via direct deposit, IRS Commissioner Chuck Rettig would like to see this number rise even further.

"The pandemic has created a variety of tax law changes and has created some unique circumstances for this filing season," he said. "To avoid issues, the IRS urges taxpayers to take some simple steps to help ensure they get their refund as quickly as possible, starting with filing electronically and using direct deposit.”

How to file taxes online

With coronavirus still a major issue, taxpayers are being encouraged to “stay home and stay safe” and use the online tools available on the IRS website if they can. If you’re happy filling out tax forms electronically, you can do so and then submit your returns online - mailing them is an option too, but should be avoided if at all possible.

Almost everyone can file for free direct with the IRS, while the service also has resources for directing you to a tax preparer if your finances are not so straightforward. Many people also prefer to use their own online tax program at home, which will guide you through the entire process, in a similar way to which the best personal finance software can help you keep on top of your money and budget. 

What do I need to file taxes online?

The first step is usually to gather all your tax records together. Not only will this make preparing a tax return easier, it could also bring to light potentially overlooked deductions or credits. As most income is taxable, you should locate documents such as Form W-2 from employers, and Form 1099-MISC if you’re self-employed, a freelancer, or a gig-economy worker. 

If you have savings, you’ll need a Form 1099 from banks and other payers to show income from interest, while there are also particular forms covering rental income received by landlords, and investment income. Should you have expenses that you’re allowed to deduct, such as mortgage or student loan interest, Form 1098 will have all the information that you need. 

Tax refunds

As well as keeping the tax office from your door, file accurately and on time and you can expect to receive any tax refund you’re due in a timely manner too. Most refunds are issued in less than 21 days, and given the impact of COVID-19 on many household finances, it’s money that could be more welcome than ever.

As a side note, if you received a tax refund in 2020 you may also have been paid interest, which is actually taxable and must be reported on your tax return. If you received refund interest totaling $10 or more, you’ll need to complete Form 1099-INT which the IRS should already have sent to you. 

When are taxes due?

Following the IRS decision to extend tax season, you now have until Monday May 17, 2021, to file your 2020 tax return and pay any tax owed. If that still isn't long enough, and you’re worried you won’t be able to file on time, you can still ask the IRS for a formal extension to file until October 15. Remember, however, you’ll still need to pay your taxes (or an estimation of them) by May 17 if you want to avoid the unnecessary expense of penalties and interest.

Stimulus checks and tax filing

The main reason tax season 2021 opened later than usual this year was because the IRS needed to prepare for the roll-out of stimulus check 2 at the same time. Now all of those payments have been sent, anyone who hasn’t received any form of relief payment, or have received less than what they thought they would get, must claim missing stimulus payments when filing taxes. If you’re eligible, you can claim the Recovery Rebate Credit on your return, which will either be added to your refund, or set against the tax that you might owe. 

What else do I need to know?

With last year’s tax season rather different to most, and a number of other tax changes having been introduced over the year too, the IRS is keen to make sure filers are as well-informed as possible to help avoid mistakes. Make sure you’re aware of the tax-filing reminders that everyone needs to know, particularly if you’ve experienced a change in your employment status over the past year or are part of the gig economy.

If you’ve been working remotely, you’ll also want to familiarise yourself with the rules surrounding home office deductions.

Derogatory marks are negative indications on your credit report that can stay there for the better part of a decade. Such marks – whether from a missed payment or bankruptcy – can drag your credit score down and affect your ability to get credit in the future.

As well as making it harder to qualify for the best personal loans or credit cards, a derogatory mark coupled with bad credit can also make it difficult to refinance your home. Additionally, it can lead to higher insurance premiums and even make it harder to rent an apartment or get a job.

Fortunately, the impact of derogatory marks on credit tends to decrease over time. 

Derogatory marks and how long they last

There are several different financial events that can result in a derogatory mark. Below, we’ve outlined eight of these, along with how long each one can stay on your credit report, and what you can do to minimise the damage: 

Missed payments

7 years
Late payments are typically those made 30 days or more after the payment due date. Usually this results in a “minor” derogatory mark, but each subsequent late payment is weighted more heavily and can further damage your credit score. 

What you can do:
Make the payment as soon as possible. If it’s your first late payment, your lender may agree to waive the late payment fee. If you’re continually struggling to meet payments, however, speak to your creditor to see if you can arrange a hardship plan. 

Account charge-off

7 years
If your lender decides you’re unlikely to repay your debt – if you’ve missed several payments, for example – it can write or “charge off” the account. The debt may then be sold to a collection agency which can be even worse for your credit. In this case, two accounts will appear on your report – the charged-off account and a new collection account. 

What you can do:
Pay off the debt or look to negotiate a settlement where you pay less than the full amount owed. This won’t remove the negative mark from your report, but it will prevent you from being sued. 

Collection accounts 

7 years from first date of a delinquent payment
If your original lender charges off the debt and sells it to a third-party debt collector, the debt will remain in collections until you pay it off, are sued, or the statute of limitations runs out. 

What you can do:
Pay the collection agency if you’re able to and ask for the account to be marked as “paid in full”. This won’t remove the mark from your credit report, but it will remove the risk of being sued, as well as show other lenders you paid off the loan.

Repossession 

7 years
Your mortgage lender can repossess your home if you are unable to keep up with your repayments. Likewise, if you continually miss payments on an auto loan, your lender can auction off your vehicle to recoup its money. 

What you can do:
Repossession can have a big impact on your credit score so it’s important to try and reduce this by paying any other bills on time and in full.

Bankruptcy

7 or 10 years
In Chapter 7 bankruptcy, certain assets are sold to pay off unsecured debts such as personal loans and credit cards. This then allows the borrower to start over with a clean slate. 

In Chapter 13 bankruptcy, on the other hand, you can usually keep your possessions. Instead, a more affordable repayment plan is set up with your creditors which typically spans a three or five-year period. Once you finish the plan, any remaining unsecured debt is discharged. 

Note that bankruptcy is extremely damaging to credit and should always be considered with care.

What you can do:
Chapter 7 bankruptcy will automatically be removed after 10 years, while Chapter 13 bankruptcy will automatically be removed after 7 years. However, it’s a good idea to take steps to start rebuilding your credit score as soon as possible. 

Tax lien 

7 years from the filing date, or indefinitely if the lien is unpaid
Liens are usually the result of unpaid taxes. The federal government can place a lien against your property in an attempt to recover the cost. 

What you can do:
Pay your taxes as soon as you can to reduce the risk of the mark staying on your report indefinitely. 

Student loan default

7 years
Late payments can affect your credit score after 30 days for private student loans and 90 days for federal student loans. Private student loans often default after three missed payments, while federal student loans go into default if you don’t make a payment for 270 days.  

What you can do:
For private loans, contact your lender as soon as possible to see if you can arrange a new payment agreement. For federal loans, you can either pay the full amount of the loan, enter a loan rehabilitation agreement, or apply for a direct consolidation loan. 

Civil judgments

7 years if paid. If it remains unpaid, the timeframe can be reset, depending on local laws
These are also referred to as civil claims and can be taken out for unpaid debts. If a creditor or collection agency files a suit in court and the court rules in their favor, a judgment can be taken out against you and this will appear on your credit report. It can have a severe negative impact on your credit score. 

What you can do:
Pay your civil judgment as soon as possible.  

Improving your credit score 

The majority of negative marks will fall off your credit report after seven years. However, the effect of these marks should start to diminish well before that, and even with derogatory marks on your report, you can still work to raise your credit score. 

Seeking help from the best credit repair services is a good place to start, but the following steps can also help boost your credit score: 

• Make payments on time – to give you peace of mind and ensure you are not charged unnecessarily, set up automatic payments on your accounts for at least the minimum amount. Talk to your lender right away if you don’t think you can afford your payments.
• Check your credit reports – if you spot any inaccurate information get it corrected as soon as possible. This includes incorrect derogatory marks. 
• Consider your credit utilization – as a general rule of thumb, it’s best to keep credit balances below 30% of the credit limit. 

Taking such action should help raise your credit score after three to six months.

Refinancing activity is on the up again after American homeowners reacted quickly to a fresh drop-off in mortgage interest rates. 

According to the latest Mortgage Bankers Association (MBA) data, refinance applications increased 10% for the week ending April 16, marking the first rise in activity since the end of February. In turn, mortgage loan applications overall were up 8.6% compared with the previous week, as home loan rates, which have been steadily rising in the early months of the year, fell sharply lower. 

"Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines,” said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. “Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains."

Refinance interest rate savings

The MBA said the average interest rate for conforming 30-year fixed-rate mortgages dropped to 3.20% from 3.27%, while 30-year FHA loans — backed by the Federal Housing Administration — fell to 3.15%, from 3.24%. The average rate on 15-year mortgages - which prove popular among existing borrowers looking to the best refinance mortgage companies to switch to a better deal - decreased to 2.65% from 2.67%.

The downturn in rates is also backed up by separate data from Freddie Mac, which found that 30-year rates averaged just 3.04% for the week ending April 15, down from 3.13% a week earlier, and that 15-year rates averaged 2.35%, falling from 2.42%.

While rates haven’t returned to the record lows that were regularly being posted last year, Black Knight says some 13 million American households still have a strong financial incentive to refinance, and could lower their monthly payments by on average $283 if they were to switch to a new low rate mortgage deal. Over 2 million could save more than $400 a month.

Should you refinance now?

If you haven’t got round to refinancing within the past year, the time to search out the best mortgage lenders is almost certainly now. Mortgage interest rates may not be as low as they were, but by historical standards they’re still extremely attractive, and there’s always the chance that the next rate move will be up. 

Rather ominously, Sam Khater, Freddie Mac’s Chief Economist, warns: “Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of this year.”

Of course, you shouldn’t just take our word for it - you’ll need to do your own calculations to make sure refinancing makes financial sense, and take into account all the costs involved with refinancing your house too. 

This means locating the paperwork for your existing mortgage and checking if there are penalties to be paid if you switch. Remember that fees will be charged for setting up your new mortgage too.

Before you start to apply for refinancing, make sure you have as much of the paperwork you’ll need to hand. Most lenders will want to see proof of income, identity forms, your tax returns, and your bank statements - they’ll also want to know all about your debts from credit cards and personal loans. 

Finally, to get the very lowest mortgage interest rates on your refinance deal, you should take the time to polish and repair your credit score too.

Questions over the possibility of a fourth stimulus check have been inevitable ever since the ink dried on President Joe Biden’s approval of stimulus check 3. Indeed, distribution of the third wave of relief payments hasn’t even been completed by the IRS, and yet the pressure for a stimulus check 4 is already being forcefully applied by some. So is there a fourth stimulus check lined up by the Federal Government and is it really needed? 

The arguments for a fourth stimulus check

With the pandemic resulting in record job losses and drastically reduced household incomes nationwide, the case for a fourth stimulus check, particularly for those hardest hit, is relatively easy to make. 

According to the latest U.S. Census Bureau data, around 30% of Americans couldn’t cover all their household expenses during March, and reported that they had needed to use credit cards, take out loans and been borrowing from family and friends to pay for food, housing and gas costs.

Backing these findings up, a Bankrate survey found that 45% of Americans were using their third stimulus check to pay monthly bills, 36% were spending it on daily essentials, and 32% were using it to pay off debt, including personal and auto loans. 

And illustrating more specifically the benefits that a stimulus check 4 could have on those struggling the most, the Tax Policy Center at the Urban Institute and Brookings Institution found that a fourth stimulus check of $1,400 would help lift some 7.3 million people out of poverty if it was to get the go-ahead. 

Will there be a fourth stimulus check?

Despite the strength of evidence of the good that a fourth stimulus check could deliver, the uncomfortable news for now is that another wave of relief payments is not currently on the cards. 

However, that’s not to say stimulus check 4 won’t happen in the future, particularly if recent pressure from advocates and interested Democrats is sustained. Indeed, before President Biden signed the American Rescue Plan that delivered stimulus payment 3, dozens of congressional lawmakers were calling for recurring stimulus checks to be paid until the effects of the pandemic subside.

“One more check is not enough," the group wrote in a letter in January. “Many families cannot afford to wait for 8 months between payments. We need to provide those struggling and left behind with consistent reliable cash payments during this COVID-19 crisis.”

At the end of March, the sentiment was echoed by a group of 21 Senate Democrats too. For now, however, the President has made no suggestion he would support a fourth stimulus check and instead remains focused on a plan to boost infrastructure. And even if Biden did come round to the idea, the rising number of people finding work, the relaxation of coronavirus restrictions and the progress of the vaccination roll out would make a smooth passage through Congress far from likely. 

What to do instead of a fourth stimulus check

If your finances are stretched, and the lack of a fourth stimulus check is hurting you, there may be certain things you can do to ease the strain:

Lower the cost of your debt
If your credit card has been supporting your spending more than it normally would, it’s vital to at least make the minimum payment each month and to pay off more if you can. Interest-free periods also provide leeway, but if these are coming to an end, or you’re racking up interest already, definitely consider a balance transfer card or perhaps a debt consolidation loan, which should make things easier to manage and could lower your interest rate. 

Trim your insurance costs
Lockdowns and remote working means car use has reduced dramatically this past year, leading some of the best auto insurance companies to offer discounts and refund customers some of their premiums. If you’re spending more time at home, you may find your home owners insurance will come in slightly cheaper than if you were leaving it unoccupied for long periods of time. Shopping around for both is key. 

Time to refinance
If you have a mortgage, but not checked out the interest rates in the past year, there’s a good chance you could save big money - or knock time off your repayment term - by refinancing. Even though mortgage rates have edged higher since the turn of the year, they remain extremely low on a historical basis, meaning if you approach the best refinance mortgage companies, some great home loan deals can still be found. 

Save and invest
If you’ve just had your annual battle with your tax software, and a tax refund is on the way, if you don’t need the funds urgently elsewhere, consider saving some of what you receive, or perhaps investing it via online stock trading to see if you can make it grow. There’s no guarantees of success with investing, but if you’re patient, and in it for the long-term, you stand a better chance of securing a decent return. 

When you refinance your home, you replace your existing mortgage with a new one. Your existing mortgage is paid off and your new mortgage can be with either the same lender or a different one. 

Thanks to the current low rate mortgage environment, refinancing has the potential to lower your mortgage payments significantly. Seeking out the best refinance mortgage companies will help you to find the most appropriate refinance deal for your circumstances.

However, while refinancing can be a sensible way to reduce your outgoings, it will also come at a price. It is therefore prudent to get the full picture on how much closing costs will set you back. 

What are refinance closing costs?

On a national level, average closing costs on a refinance are around $5,000, according to data from Freddie Mac. In general you can expect to pay 2% to 5% of the total loan amount. So, if you were refinancing a $175,000 mortgage loan, for example, you could pay between $3,500 and $8,750. 

Costs will be dependent on factors such as:

• Your loan size 
• Your mortgage term
• Your mortgage lender
• Your location
• Your credit score.

Common mortgage refinance fees

If you’re thinking about refinancing your mortgage, some of the most common closing costs fees are outlined below:

• Loan application fee: Some lenders will charge an application fee when you apply to refinance. Often this must be paid even if your application is rejected, and it can vary between $75 and $500.
• Origination fee: This is the fee to process, underwrite and close the loan for you. It can be between 0.5% and 1.5% of the loan amount. 
• Appraisal fee: A property appraiser will need to evaluate your home and assess its value. Expect to pay between $300 to $400.
• Credit check fee: Lenders will need to check your credit report before your application can be accepted. The fee charged for this usually sits between $30 and $50.
• Title search and insurance fee: Your lender will typically require a title search before your refinance can be approved. This can cost around $400. Additionally, you’ll need to purchase a new title insurance policy to guard against any problems with the title transfer. Costs are around $800.
• Recording fee: Depending on the area you live in, you may be charged a recording fee for handling the paperwork. Costs vary depending on location but are usually between $25 and $250.
• Flood certification: Some areas require you to pay for flood certification. This typically costs $50 to $150. 
• Attorney fee: Certain states require an attorney to review and file paperwork for your refinance. Fees can range from $500 to $1,000.

How to lower the cost of refinancing

If you’re concerned about how much refinancing will set you back, there are several steps you can take to reduce these costs:

Improve your credit score
A good credit score can increase your chances of being offered the best refinance deals. So, before applying to refinance, be sure to check your credit score and work on improving it if necessary. This is something the best credit repair services can help with, but measures include correcting any errors on your credit report, paying bills on time and reducing your outstanding debt.

Keep in mind that refinancing has the potential to hurt your credit score – whether you’re refinancing a mortgage or a personal loan. For this reason, it’s crucial that you continue making repayments to your old mortgage loan while your new one is being approved and ensure you don’t miss your final payment. 

Compare multiple lenders
As with any financial product, the best way to get the best deal is to shop around and compare what’s on offer from the best mortgage lenders. Look at options with both your existing lender and a range of others. 

Negotiate fees
Don’t be afraid to speak up and ask for a better deal. If certain fees seem particularly high, see if you can negotiate with your lender. You’ll have a stronger case if you’ve shopped around and have more than one refinance offer open to you. 

Avoid buying mortgage points
To reduce closing costs, ask yourself this: are mortgage points worth it? Mortgage points, or discount points, allow you to pay an upfront fee to reduce your interest rate and as a result, your monthly payments will be lower. 

However, if you’ve got good credit, you should already be able to access lower interest rates without the need to pay for mortgage points. 

Keep the same title insurance company
Ask the title insurance company you worked with when you first bought your home if it can reissue the policy for your refinance loan. If the company agrees, you could save a significant sum of money.  

Consider a no-closing-cost refinance
If cash is limited, see whether your lender will offer you a no-closing cost refinance. It won’t be free, but you won’t have to pay anything upfront. Instead, your lender will either charge a higher interest rate or add the closing costs to your loan – the downside is that you’ll pay more over the lifetime of the loan. 

Reasons to refinance your home 

There are several reasons why you might want to consider refinancing your home. But the main ones include reducing your interest rate, shortening your mortgage term or accessing available home equity. 

Mortgage rates are currently at record lows, and this means if you can secure a lower interest rate, you could be one of the millions of homeowners to save a substantial amount of money on your monthly mortgage payments. Alternatively, you may be able to reduce your mortgage term by several years which, in turn, will reduce the amount of interest you pay overall.

Should you need to get hold of additional cash to pay for credit card debts, home improvements or school fees, for example, you may be able to do a cash-out refinance. This will only be an option if you have built up a significant amount of equity in your home over the years.

To find out more about refinancing, make sure you check out our guide on how to refinance your mortgage.

In most years, the tax season would have been over by now. But with COVID-19 continuing to complicate so many aspects of everyday life, the Internal Revenue Service (IRS) has once again extended the tax filing deadline, and this year set it to May 17. 

Of course, many millions of Americans will have already dutifully filed and been able to retire their tax software for another year. But having been afforded the luxury of an extra month to file if they so wish, a huge number of taxpayers will still leave everything to the last minute, safe in the knowledge that the threat of late-filing penalties is not yet a reality.

If that includes you, it’s still best not to let complacency set in, and to be aware that there is now under a month until that final deadline will arrive. In the coming days and weeks, therefore, take heed of the following six tips that all filers should consider with the end date of May 17 firmly in mind. 

Check your state tax deadline

Even if you think you have time in hand to get your taxes prepared, it's definitely worth double-checking that the deadline you have in mind is the one you think it is. The reason for this is that the May 17 extension applies to federal income taxes, and that the due date for filing state income taxes, in contrast, is not always consistent across the board. 

According to AICPA, 36 states have extended their tax filing and payment deadlines to May 17, while Iowa (June 1) and Maryland (July 15) are giving even longer. On the other side of the coin, Hawaii and New Hampshire gave their residents no additional time beyond the usual April 15 deadline to file their state taxes. 

Further disparities regarding filing and tax payment due dates are apparent too, so if you're unsure, definitely take the time to check out your state’s department of revenue website for information specific to where you live. 

File if you’re expecting a refund

Taxpayers who are anticipating a tax refund are probably best filing sooner rather than later. Over half of Americans are relying on their refund to boost their finances this year, so if you're among them, there could be a more-than-useful sum of money waiting for you right there at the IRS. 

The majority of filers will qualify for a refund, with the sums involved often running into several thousands of dollars, so these are amounts that no-one will want to miss out on. Importantly, if you’re entitled to a refund for 2017, you are now in the last-chance saloon for filing a prior year tax return to make sure that payment finds its way to you. 

The IRS will issue most tax refunds within 21 days of accepting a tax return, but filing online and opting to have the funds sent via direct deposit is the best way of getting your refund fast. 

Also remember that your tax return is key to securing stimulus checks. Indeed, right now the IRS is sending "plus-up" payments to people who have recently filed and the agency has just realized, as a result, are actually owed more relief money than they were originally paid. 

Claim for every deduction

To keep your tax bill as low as possible, making the most of the various deductions and credits that are applicable to you is a must. Of course, this means claiming for things such as mortgage interest  if you're a homeowner, child tax credit if you're a parent, medical expenses, and student loan interest deduction, and so on. 

This year, however, with more people working remotely, it's particularly important to be across the home office deduction rules, which may not be as favorable you'd think. And if you've spent big on personal protective equipment due to COVID, it's worth noting that face masks and hand sanitizer are tax deductible too. 

The filing process might be a little different

Another side effect of the coronavirus that has carried over from last year has been the challenge it has presented to the IRS in the processing of paper tax returns. As a result, taxpayers are once again being urged to file electronically to make the process both safer and speedier than sending your documents through the mail. 

It's also possible to make tax return amendments online now too, although only in relation to tax year 2019 and 2020 returns. 

If you’re filing online for the first time, gather together all the information you would need if you were filing a paper return, then visit the IRS website for advice on how best to proceed. If your income was $72,000 or less last year, you should be eligible to use IRS Free File software. For those with more complex filing requirements, tax programs are there to help.  

Contact your tax preparer

If you usually have a tax preparer ready everything on your behalf, it might be worth checking on their availability now. As with last year, COVID-19 has thrown the normal working lives of most people out of shape, and tax professionals will be no different. There is also a chance they will have more customers demanding their services than usual, so make sure you schedule your slot early, ahead of the inevitable last minute rush.  

Is May 17 still not long enough? 

If you fear the May 17 deadline still doesn’t give you enough time to file, it is possible to ask the IRS for an extension until October 15. You can request this extra time by filing Form 4868 through your tax preparer, tax software, or the Free File link on IRS.gov. 

Importantly, the form only allows an additional three months in which to file a federal tax return - you’ll still need to pay your taxes by May 17 in order to avoid possible penalties. For this reason, the extension form asks taxpayers to estimate their tax liability and pay this estimated amount. 

Americans have prioritized paying their mortgage ahead of all other credit products during the pandemic for fear of not wanting to risk losing their home. 

According to a new TransUnion study, the COVID-19 health crisis has had a huge impact on how people pay their debts, particularly in the face of financial stress. In the United States, the change in behavior was notable across many credit products, but it was mortgage loan payments that were mainly put first over what may have been owed on auto loans and credit cards.

With almost 28 million Americans holding all three loan types as of Q3 2020, the analysis found that the delinquency rate where borrowers were over 30 days behind on payments was lowest for mortgages, at 0.75%. Auto loans had the second lowest rate of 1.13%, followed by credit cards at 1.95%. 

Why are people putting their mortgage first?

As to why mortgage payments have been the priority for most, the survey suggests it is because Americans believe their home loan offers the highest perceived value of all the expenses competing for their attention. 

Part of this is likely connected to the desire to protect the equity that has accumulated in their properties following strong house price growth in recent years. In addition, there is a sense that keeping current on home loan payments has taken on increased importance because of the greater amount of time spent at home during lockdowns and the shift to working and schooling from home.

“Mortgage is once again the clear priority for U.S. borrowers,” said Matt Komos, TransUnion’s head of research and consulting in the U.S. “The mantra, ‘you can’t drive your home to work’ doesn’t have the same effect when millions of Americans are waking up, showering, eating breakfast and taking only a few steps to their home office.”

As well as the growth in remote working and rise in home values, the study also notes that fewer people will have fallen delinquent on their mortgage due to the large number of borrowers who will have quickly entered accommodation programs, and been able to delay payments and maintain their accounts, during the pandemic. 

While these people may have had their mortgage fears allayed for a while at least, the survey also reveals the weight of pressure that others have felt to keep up with their payments. Indeed, six in 10 homeowners said they expected to receive a call from their lender if they missed one mortgage payment and more than half (52%) were concerned by the damage that might be inflicted on their credit score if they skipped a payment. Almost one in five (17%) were fearful of the threat of foreclosure or repossession should they miss a mortgage payment.

Which debt should you pay off first?

The reasons put forward for not wanting to miss mortgage payments definitely have their merits, yet in some circumstances, arguments can be made as to why other debts may need to take priority. In particular, anyone with a payday loan should almost certainly be looking to pay down this high rate and high risk debt first. 

Indeed, for some people, the instinct will always be to pay off the credit that is attracting the highest rate of interest first, and this is an eminently sensible strategy to adopt, as you’ll pay less in interest over the long term. If this is the approach for you, it’s important to remember, however, that you must also meet the minimum payment requirements on credit cards and personal loans at the same time to avoid costly penalties. 

For others, the need to keep themselves motivated and see that they are making tangible progress in lowering their debt may make paying off their smallest debt first a better approach. If this doesn’t happen to be the debt with the highest interest rate, then you may end up paying more in interest overall. However, for some people, the psychological benefits of being able to say that they’ve ticked something off their debt list, and giving them the impetus to clear more, will prove more important. It’s also worth considering that the quicker you pay down what you owe, the better it is for your credit rating. 

A further option if you’re really struggling to work out which debt to meet first could be debt consolidation, as by bringing everything that you owe together into a single loan, the only priority you’ll have is making that one payment.  

Mortgage prequalification and preapproval. The terms are often used interchangeably, but there are actually distinct differences between the two – and if you’re searching for the best mortgage lenders, it’s worth knowing what they are so you know exactly what you’re dealing with, and how they can work in your favor when you’re buying a home. 

What is mortgage prequalification?

Mortgage prequalification is the process of determining how much you might be able to borrow from a lender. It’s usually the first step in your homebuying journey and is based on a fairly informal appraisal of your financial status and credit commitments; some lenders will run a soft credit check, while others will simply ask for details of your financial obligations and any personal loans you may have, either over the phone, online or in person. 

Once you’re prequalified, you’ll have an idea of the kind of mortgage you could be eligible for, and it could even point you in the direction of potential loans. Lenders will normally use this stage to discuss your requirements and will advise on the mortgage most suited to your needs, explaining the options accordingly. However, at this stage you’re only getting a ballpark estimate of the mortgage you may qualify for; nothing’s set in stone, and the lender will need to take a closer look at your finances (during the preapproval stage) in order to confirm eligibility.

Nonetheless, getting prequalified for a mortgage is standard practice in the current market. It essentially offers proof that you’re likely to be able to buy the home you’re interested in, and most sellers will require evidence that you’re prequalified (normally you’ll be expected to give them a copy of the prequalification letter) before taking that interest further. 

How long does it take to be prequalified?

It depends on the lender, but it can be a very quick process, particularly if you go online – in some cases, you can become prequalified in as little as an hour. You’ll likely need to wait a few days to receive the prequalification letter, however, and bear in mind that your prequalified status will usually expire after 90 days; if it’s lapsed, you’ll need to go through the process again. 

Does mortgage prequalification affect your credit score? 

Provided the lender only undertakes a soft inquiry on your credit report, it shouldn’t affect your score. Some lenders won’t look at your report at all and will simply use the information you provide when determining your prequalification status, so this should have zero impact on your credit rating. 

What is mortgage preapproval?

Mortgage preapproval is the next step of the homebuying process, and is much more rigorous. This is the stage during which your lender will conduct a more detailed examination of your finances to determine the mortgage you can afford, and as such will run a more thorough credit check and ask for verification documents (such as bank statements, tax returns, etc.) so they can properly assess your financial situation. 

You’ll need to fill in an official mortgage application and, once the lender has analysed your finances, checked your credit score and performed the necessary calculations, you’ll be preapproved for a loan up to a specific amount. This gives confirmation of the mortgage you’ll likely qualify for and you can use this to your advantage – by getting preapproved, sellers will know you can follow through on an offer which could put you ahead of those who aren’t at the preapproval stage, and it can often speed up the buying process, too.

Getting preapproved can also give you certainty over the ceiling price of properties you can look for, as well as giving a better idea of the interest rates and fees your lender could charge – some lenders will even let you “lock in” a certain interest rate, though this will likely be at a cost – which could be useful for your own affordability calculations. Bear in mind, though, that preapproval still doesn’t guarantee that you’ll be given a mortgage, particularly if your circumstances change between preapproval and actually taking out the loan, but it can definitely give you leverage and is the closest you can get to a loan commitment.

Does mortgage preapproval affect your credit score? 

Yes. Mortgage preapproval requires a hard credit check, which will always show up on your credit report and could result in a temporary dip to your score. However, the key word here is “temporary” – any negative impact is likely to be minimal and, provided you keep up with effective credit management habits, can quickly be reversed. 

How long is a mortgage preapproval good for? 

A mortgage preapproval can initially take longer to come back from the lender, simply because of the extra checks involved, but once you’ve received the preapproval letter it will typically be valid for 60-90 days. For this reason you’ll want to time things carefully to ensure you’re in the right position to buy the home you want. 

So… what’s the difference?

The main difference between the two is in terms of the weight of their credit checks and resulting proof of your creditworthiness. Preapproval gives a more specific idea of the amount you’ll be able to borrow and, as such, carries more substance when it comes to negotiating with a seller; that said, prequalification could still be beneficial if you’re in the early stages of scouting out your ideal home. 

Ultimately, prequalification and preapproval should be seen as vital first steps on your mortgage journey, helping ensure you’ll be able to get the home you want. 

However, both are arguably more important when buying a new home than when you’re refinancing or seeking a reverse mortgage; if you already own the home you won’t need to compete against other buyers to show your worth, though you’ll still need to go through the approval and credit checking process to ensure you’ll be eligible for a new loan. It may also be worth seeking the best credit repair services if you’re in any way concerned about your credit profile.

The majority of Americans are putting their third stimulus check to immediate work covering essential household expenses and paying down debt, a new survey has revealed. With almost 160 million payments having been disbursed to date, Bankrate.com found that 45% of recipients are using their checks to meet monthly bills, and 36% are spending the funds on day-to-day essentials such as groceries. 

Sensibly, around a third - 32% - are using the money to keep on top of their debt obligations, whether they be from personal loans, credit cards or auto loans, and 28% are taking the opportunity to boost their savings. In a similar vein, around one in ten (11%) intend to invest and engage in stock trading in the hope of bolstering their finances further down the line. 

“Stimulus continues to be a bit of a misnomer, with households predominantly using the money to pay monthly bills and provide day-to-day essentials,” said Greg McBride, CFA, Bankrate chief financial analyst. “Even households with those bases covered are opting to pay down debt and boost savings – prudent decisions that lead to more sustained spending in the future.”

Stimulus payment choices

The figures highlight the stark choices being felt by many households that have seen incomes impacted by the pandemic, and the real relief that the checks are providing to the hardest hit families. Indeed, when questioned specifically on the matter, exactly half (50%) said that the check was “very important” to their near-term financial situation, while a further 30% felt it was “somewhat important”. 

Also telling is that just 13% of Americans intend to use the funds on non-essential spending. “For all the talk of revenge spending and pent-up demand for travel, you wouldn’t know it,” added Greg McBride.

And in a sign of the scale of financial struggles that might lay ahead, 61% of Americans believed that the payment they receive - which could be worth up to $1,400 - will sustain them for less than three months. Even more worryingly, one in five (21%) of that group said the funds wouldn’t sustain their financial wellbeing for a month, while 14% were in such dire straits that they believed the check wouldn’t prop up their finances at all. 

How to make the most of your stimulus payment

If the latest relief payment has just landed in your bank account, maximizing its use is essential. With so few people spending their checks on discretionary items and activities, the survey illustrates that most people are doing this anyway. But in case you’re in any doubt, here’s how to make the best use of your stimulus payment.

Talk to lenders
Job losses and reduced hours have seen the incomes of millions of households take a hit this past year, heaping pressure on those trying to meet housing and debt repayments. If you’ve fallen behind repaying what you owe as a result, there are options available, such as debt consolidation, which may be able to help, but first you should talk to your lender to see what they can do. This might be via a forbearance program or there may be ways that you could lower your interest rate, perhaps through a refinance mortgage. You won’t find out unless you ask, so touch base with those that you’re in debt to. 

Create an emergency fund
If you don’t immediately need the money to get by, putting some aside in an emergency fund is a great way to give yourself some financial protection for the future. Even if it’s just a little, it can help - recent research showed that having just $100 in savings can help to keep household finances afloat, so ask your online bank about accounts from which you can access money quickly and easily if needed, and save what you can. If you’ve just filed your taxes, and you’re in line for a refund, maybe some of this can be saved too.  

Assess your spending
It’s as simple as it sounds - do you really need to buy that coffee on your way to work when you can make one at home for a fraction of the price, and is that latest smartphone really an essential purchase? The best personal finance software is a great way to keep track of your spending, but equally a pen and paper, or a quick glance at your bank statement, could easily highlight the areas where you may be able to cut back on your spending too. 

Willing is a website created by a company called Bequest Inc. The company only came to the market in 2015, but it didn't have to wait long in order to make its way onto our shortlist of the best online will makers. The company’s stated ethos is to ‘make it easy and affordable to create a quality estate plan’ and they claim to have helped more than half a million people create legal documents such as last wills and testaments, trusts and powers of attorney. 

Like some of its peers, Willing offers a free service to create a will, but also like most of those companies, they do charge a fee to download and print said document, so it is not a completely free service in the same way that Do Your Own Will is. Willing is not a law firm, and there is no legal support offered through the website. 

How much does Willing cost?

• Free to create a document
• To download, there is a fee of $69

In accordance with most online will-preparation solutions, Willing will create your will for free with a few simple steps. Users create an account and at this stage, no credit card information is necessary. Once the document has been created, however, users are taken to a screen with various payment options. To download an individual will incurs a $69 charge. Their Homeowner package comes in at $299, and the Ultimate Care package is $399. The first option is in the arena of industry average for the creation of a document (but is nowhere near as cheap as Law Depot), while the last two options are on the higher end. Individual documents, such as Durable Power of Attorney and similar, can be created cheaper elsewhere too. 

Willing review: Products

Willing offers three products. By far the most popular is the Individual Last Will & Testament package at $69, which allows users to leave property to their family and make plans for medical emergencies, and it includes basic versions of a Living Will and Durable Power of Attorney. Unlimited changes are allowed for up to six months. The Homeowner package at $299 includes all of this, plus a Transfer of Property on Death deed (which passes on a user’s property without court fees) and a Revocable Living Trust. The Ultimate Credit package, which costs $399, offers all of this, but also has three years of unlimited changes allowed, physical documents that are delivered overnight, and ‘Premium Customer Support’ including nights and weekends. All documents are offered with a full money-back guarantee. 

Willing: Document creation

Creating a last will and testament in the website is very easy, and for a straightforward case such as leaving everything to a spouse, the process takes a matter of minutes. Although the questions are all very basic, there is little in the way of online support, so being prepared is advisable. If you feel you'll need guidance along the way, Quicken WillMaker may be a better choice. 

A last will and testament that is legally binding in all 50 states is available to download as soon as users have finished the interview process and paid the fee via credit card. Officially printed documents can also be sent via mail. 

Although Willing is not a law firm, the company does offer some basic legal help via their website in the form of an informative blog, searchable via a specific legal term or viewable as a list. The articles cover most of the basics of will preparation and estate planning.

Willing review: Usability 

Willing is aimed at creating a basic will covering straightforward circumstances, and as such its process is accessible and easy. The main website is dedicated only to the creation of the document, with one link to their database of legal self-help articles and one link to testimonials about the company. Other than that, users are taken straight into the creation process. 

The will is created via a short series of screens, each of which ask the user to click on the information relevant to them. Some names fields are required to be filled, but that aside, there is very little asked of the user other than clicking on the information relevant to them. The screens are bright and clean and user-friendly. 

All of the process and the information is stored in the cloud, and so the site can be accessed from any device with an internet connection. The way Willing’s site is designed makes it a particularly good option for users accessing the process from a mobile phone, and it is one of the best-optimised sites for this scenario. There is a customer support helpline, but this does not put users in touch with legal professionals. In any case, the entire process can take less than five minutes. 

Should you choose Willing?

Willing is a very user-friendly, easy way to create a Last Will and Testament. The process could not be more simple, and users can create a will in a matter of minutes. The individual will package comes at about an average price for the industry and is legally binding in all 50 states. The premium packages, while comprehensive, offer less value than those of some of the company’s competitors. Extras such as customer service are a little stripped-back, and there is no access to legal consultation, but if all that a user needs is a straightforward will leaving everything to one person, then Willing is a perfectly reasonable service.

The US states with the lowest and highest tax burden have been revealed after half of Americans admitted they’d rather suffer the inconvenience of jury duty than file their taxes. 

A further 38% told WalletHub that they’d happily move to a different country if it meant they never needed to go near the best tax software again, while 27% said they would get an “IRS” tattoo for a tax-free future. All told, Americans spend 8 billion hours filing their taxes each year, with an average person spending 12 hours and $230 completing their 1040. 

Unravelling your tax burden

Of course, the COVID-related filing extension to May 17 means taxpayers have a little longer than usual to get their finances in order than in a typical year. However, what the pandemic and its detrimental effect on the finances of millions of Americans also means is that many taxpayers will be paying extra attention to how their tax obligations will impact their household finances. 

With tax codes notoriously difficult to unravel, WalletHub suggests a simpler way to cut through the confusion is by assessing your state’s “tax burden”, a ratio that measures the proportion of total personal income that residents pay toward state and local taxes. 

Unsurprisingly, this is far from uniform across the U.S. either, with property taxes, individual income taxes, and sales and excise taxes all accounting for a varying share of a household’s total personal income in each state.

States with lowest tax burden

For those living in the following states, the burden of tax on their finances has been measured to be the lowest. So if you want to keep as much of what you earn for yourself, Alaska - where just 5.1% of an individual’s income goes in taxes - is the place to live. The next-best alternatives are Tennessee (5.74%), Wyoming (6.14%) and Delaware (6.21%). 

States with highest tax burden

The unfortunate news for residents of New York is that they can expect to lose more of their income to tax - 12.79% - than anyone else across America. The next highest is Hawaii (12.19%), followed by Vermont (10.75%) and then Maine (10.5%). 

Keeping your taxes in check

The key to keeping as much of your money away from the taxman as possible is to claim all of the deductions and credits that apply to you. If you’re a homeowner, most will find that the mortgage interest that you pay is deductible, and if you’re self-employed and work from home, the home office tax deduction is something to explore too.

An element of confusion has persisted around the relief payments that Americans have received to see them through the pandemic, but stimulus checks are not taxable, so you can keep all of that money for yourself. If you spend big on personal protective equipment to guard against coronavirus, it’s also been confirmed that face masks and sanitizer are tax deductible too. 

One thing you definitely don’t want to do is give money away unnecessarily, so that means meeting all of the deadlines when you should, and asking the IRS for an extension should you need one. With over half of Americans relying on a tax refund to boost their finances this year, you also don’t want to miss out on any money that you might be owed. 

The IRS says it has sent over 1 million “plus-up” payments to American taxpayers that it has determined were underpaid on their third stimulus check. The agency added that more of these supplemental payments - which should not be confused with a fourth stimulus check - will be sent over the coming weeks, as and when it becomes apparent that people are owed more under stimulus check 3. 

With the distribution of the third stimulus check falling within the tax season, some will have received stimulus check 3 payments based on their 2019 tax returns but could actually be eligible for a larger payment - or one that they weren't entitled to before - if they’ve recently filed a 2020 tax return, and their circumstances have changed. 

Examples of when you might be owed more include if your income fell year-over-year, either due to unemployment or reduced hours, or if you had a new child. The stimulus plus-up payments are effectively putting any such wrongs right, and in totaling more than $2 billion to date, it means the average payment so far has been around $2,000 - a huge incentive for people to fire up their tax software if they haven’t done so already. 

Delayed Social Security payments also confirmed

At the same time, the IRS confirmed that around 25 million Social Security recipients should soon find that the third stimulus check has now landed in their bank accounts.

Despite the distribution of stimulus check 3 starting mid-March, payments to around 30 million Americans in receipt of Social Security, Supplemental Security Income and Railroad Retirement benefits had been delayed after the Social Security Administration failed to share payment information with the IRS. 

Now, however, the agency says that more than 19 million payments, with a total value of $26 billion, have been sent to Social Security beneficiaries, including Social Security retirement, survivor or disability (SSDI) beneficiaries, who didn’t file a 2020 or 2019 tax return and didn’t use the Non-Filers tool last year. A further 3 million payments have been sent to Supplemental Security Income (SSI) beneficiaries, and almost 85,000 payments to Railroad Retirement Board (RRB) beneficiaries.

The roll out of third stimulus checks to Veterans Affairs (VA) beneficiaries has also begun, with veterans and their beneficiaries who receive Compensation and Pension benefit payments, but who don’t normally file a return, being told funds should be in their accounts on April 14. 

The latest dispatch also includes another 1 million payments for those whom the IRS did not previously hold the details it requires to issue a check, but who have now filed a return and are eligible for the relief payment. 

Who has been affected by the delay? 

The IRS said that many federal beneficiaries who have filed a 2019 or 2020 tax return, or used its Non-Filers tool last year, should already have seen their third stimulus check distributed. 

Those affected by the delay were specifically Social Security retirement, survivor or disability (SSDI), Supplemental Security Income (SSI), and Railroad Retirement Board (RRB) beneficiaries who have not filed a return for either of the past two years or used the Non-Filers tool. Those in receipt of VA benefits and who do not regularly file tax returns were told they may have to wait until mid-April before their stimulus checks start to be disbursed. 

What should social security recipients do? 

Most Social Security retirement and disability beneficiaries, railroad retirees and recipients of veterans benefits who qualify for a stimulus payment should not need to take any action in order to secure their relief payment, which will generally be paid in the same way that they receive their regular benefits.

However, some federal benefit recipients have been told they may need to file a 2020 tax return, even if they don't usually file, to ensure the IRS has the information it needs to deliver the necessary payments for any qualified dependent. 

What we know about stimulus check 3

Stimulus check 3 is the biggest direct payment so far, with eligible individuals receiving up to $1,400, and all dependents receiving $1,400 this time around too. For the original stimulus payment and stimulus check 2, the lower additional sums of $500 and $600 were awarded to dependents respectively, and only for children age 16 or under. This meant households with older children, who were age 23 or younger and at college, or with elderly parents living with them, didn’t receive the extra funds - but they will this time. 

In line with the checks that have gone before, individuals with incomes up to $75,000 a year, heads of household earning up to $112,500, and joint-filers bringing home up to $150,000 combined will qualify for the full payment. This time, however, as we've already mentioned, adult dependents will be eligible for the money, along with mixed status households too. 

Where a change has been made is in the rate at which the third round of payments will begin to phase out - as a result, individuals who earn over $80,000 a year, heads of household at $120,000, and married couples with a joint income in excess of $160,000 won't be receiving any payment.

Make sure you receive the third stimulus check

One difference to the stimulus checks that have gone before is that the third round is being delivered in the midst of a tax season. As eligibility for the third payment, and the amount that people can expect to receive, will be determined using the most recent tax return processed by the IRS, taxpayers are being urged to file returns online as early as possible to make sure the stimulus check they receive will reflect their current situation.   

The need to employ the latest tax software quickly is made even more urgent if people have experienced significant changes in their lives within the last year, including job loss, a reduction in income, or the birth of a new child.

For those who are yet to file a 2020 tax return - the deadline for which has been extended to May 17 - the IRS will probably use their 2019 return to work out their third stimulus payment. However, if this doesn’t reflect the lower income they are now receiving or new children, they may miss out on some or all of the money for which they are eligible. For anyone wondering, stimulus checks are not taxable as income.

With regard to those who don’t usually file taxes, the advice is to file Form 1040 or Form 1040-SR, so that the IRS can assess eligibility and will know where to send stimulus payments - this will also allow the service to calculate whether people are due the Recovery Rebate Credit, which ensures people receive all of the money that they are owed from the first two stimulus checks. Anyone with income under $72,000 can file a Federal return at no cost via the IRS Free File program.

When will the third stimulus check arrive? 

As soon as stimulus check 3 was signed into law, it was all systems go at the IRS for delivering the payments to the American people. Policymakers had been keen to pass the bill before March 14, when expanded unemployment benefits were due to expire, and this informal deadline has been met. 

For the second round of stimulus payments, the IRS began distributing payments just three days after then-President Donald Trump put his signature to the necessary paperwork, and a similar turnaround time has been achieved again.

"Since the Treasury Department - Department of Treasury and the IRS are working hard to get relief payments out the door as fast as possible to the American people, people can expect to start seeing direct deposits hit their back accounts as early as this weekend [March 13-14]," said Press Secretary Jen Psaki. "This is, of course, just the first wave. And payments to eligible Americans will continue throughout the course of the next several weeks." 

Those who have received past stimulus checks by direct deposit are more likely to receive their third payment quickly because the IRS will already have their account details on record. Given the additional time needed to print physical stimulus checks and arrange pre-paid debit cards, and the time spent in the mail, anyone expecting their payment by these methods will probably be waiting longer.  

"Because these payments are automatic for most eligible people, contacting either financial institutions or the IRS on payment timing will not speed up their arrival," the IRS added. "Social Security and other federal beneficiaries will generally receive this third payment the same way as their regular benefits. A payment date for this group will be announced shortly."

President Biden pledged previously to make it easier for Americans to receive their payment, with the IRS being tasked to create additional online tools and “simple options” to help people through the process. With the experience of delivering two previous stimulus payments to draw upon, the IRS seems in a good position to turn around the vast majority of payments within a short period.

How many stimulus payments have been sent?

The IRS confirmed last week that over 127 million Americans are already in receipt of the third stimulus check, meaning more than $325 billion in relief funds is now sitting with households across the US, waiting to be put to good use. 

For those finding it difficult to pay the rent, their mortgage or everyday bills, the delivery of the third stimulus check couldn't have come too soon, while for others the windfall could deter the need to borrow on credit cards, personal loans or even payday loans, and allow existing debtors to pay back what they owe.

The first batch of payments were mostly received by eligible taxpayers who provided direct deposit information on their 2019 or 2020 tax returns, including people who don't usually file a return but used the Non-Filers tool on IRS.gov last year. While most of these early payments were delivered by direct deposit into online bank accounts, the Treasury confirmed it had also mailed roughly 150,000 paper checks worth approximately $442 million, which Americans can expect to receive soon, if they haven't already. 

The IRS added that over 37 million people have received their third stimulus check via the "Get My Payment" tool on its website, and reassured those still waiting that payments will continue to be sent over the coming weeks via direct deposit and through the mail as a check or debit card. Most people will receive their payment automatically and usually via the same route that they received the first and second round of relief payments last year. 

"The payments will be delivered automatically to taxpayers even as the IRS continues delivering regular tax refunds," said IRS Commissioner Chuck Rettig. "We urge people to visit IRS.gov for the latest details on the stimulus payments, other new tax law provisions and tax season updates."

Third stimulus check paper checks, debit cards

A large number of paper checks and prepaid debit cards are currently being sent in the mail. Anyone who did not receive their third stimulus check by direct deposit by March 24 has been advised by the Internal Revenue Service (IRS) to watch the mail carefully in the coming weeks.

Paper checks will arrive in a white envelope from the U.S. Department of the Treasury, with taxpayers who receive their tax refund by mail being advised that the stimulus check mailed out will look similar, but will be labeled as an "Economic Impact Payment" in the memo field instead.

Prepaid debit cards will also be sent in a white envelope prominently displaying the seal of the U.S. Department of the Treasury. The card itself will have the Visa name on the front and the issuing bank, MetaBank, N.A. on the back. Information included with the card will explain that this is an Economic Impact Payment (EIP). 

Will you receive your stimulus check by mail?

The IRS has told taxpayers the payment method by which they receive the third stimulus check could be different to how they received earlier stimulus payments. More people will receive their money by direct deposit this time around, in particular because the tax season is in full swing and the IRS now has the bank details of more Americans on file to allow payment to be made this way. 

Equally, those who received a paper check last time out could receive a prepaid card this time around, and vice versa. However, if the IRS has your direct deposit information on file, or can use federal records of recent payments to or from the government, then the money should land direct in your bank account rather than by mail. If the direct deposit details on file relate to a closed bank account, the payment will be reissued by mail to the address on file with the IRS. 

Who gets a paper check and who gets a prepaid debit card is not decided by the IRS.

How to use the stimulus check prepaid card

For the third stimulus checks that are being distributed by prepaid debit card, each mailing will include instructions on how to securely activate and use the card. A website has also been set up with further guidance. 

To get started, you'll need to:

• Read the Cardholder Agreement and Fee Schedule
• Activate your EIP Card account, set your 4-digit PIN and get your balance by calling 1.800.240.8100
• Sign the back of your EIP Card
• Keep your EIP Card in a safe place.

The EIP prepaid debit card can then be used anywhere that Visa Debit Cards are accepted in-store, online or by phone, including to pay bills. It can also be used to get cash back at the register with PIN debit purchases at participating merchants, and to withdraw cash surcharge-free at any in-network ATM. Funds can also be transferred to a personal bank account, and the balance remaining checked online, through a mobile app, or by phone.

The prepaid debit card provides consumer protections against fraud, loss, and other errors, and it's possible to obtain a replacement card, if needed, without incurring any fees. Importantly, however, none of the EIP cards issued for any of the three stimulus payments are reloadable, and so can't be added to with extra funds once the funds have been spent.

Refinancing an outstanding loan can be a prudent way to reduce your outgoings, with the goal being to secure a lower interest rate and therefore lower monthly repayments. But whether you’re refinancing a mortgage, a personal loan or an auto loan, you’ll likely find that your credit rating will be impacted, at least temporarily. So why does refinance hurt your credit, and is there anything you can do to negate the effects? 

Why does refinance hurt your credit?

The main reason that refinancing can affect your credit score is that the lender will run a credit check when processing your application (what’s known as a hard inquiry) which will always result in a temporary dip to your score. These inquiries can stay on your report for around two years, though their impact on your score will begin to lessen after the first six months.

Then there’s the fact that you’ll be closing an old credit account and replacing it with a new one, which will reduce the overall age of your accounts and therefore lower your score. However, some credit bureaus will take your payment history into consideration before determining the impact on your rating, and if you were up to date on your old loan, any dip should be lessened. Just bear in mind that new accounts will always be viewed less favorably, as you haven’t been able to build up a payment history yet. 

There may be additional aspects to consider as well, depending on the kind of loan you’re looking to refinance. 

Refinancing your mortgage

With low interest rates recently offering the chance to save big on mortgage payments, it’s little wonder that so many are seeking the best refinance mortgage companies. However, it’s important to be on the ball when syncing up your payment schedules to prevent your score being downgraded further than you anticipated.

You’ll need to continue making repayments to your old loan whilst your new one is being approved, and make sure you don’t miss that final repayment. Even if the new loan is designed to cover it, there’s the chance that it could arrive after the payment becomes due, which could result in a greater hit to your credit score. It’s your responsibility to make sure that all payments are made on time, so don’t fall at the final hurdle.  

A refinanced mortgage could lower your score in another way, too, because the new balance will be 100% of the origination amount. Any information about how much of the loan you previously paid off won’t carry over, so that uplift to your score will be lost. That said, it could still pay to refinance your mortgage, simply for the potential to substantially lower your repayments.

Refinancing a personal loan

Personal loans can impact your credit score in a number of ways, and refinancing such a loan is no exception. However, as with other forms of refinancing, the dip will primarily be driven by hard inquiries on your credit report and therefore should be both minimal and temporary. You may even find that refinancing can improve your score over time, provided you manage the new loan appropriately. 

This is particularly the case if you’re refinancing for debt consolidation purposes – as well as making your repayments more manageable, consolidating several loans into one will mean you have fewer accounts with outstanding balances, which can have a positive impact on your score. Find out which loans to pay off first if you’re considering going down this route.  

Refinancing your auto loan

If it’s a car loan you need to refinance, the same general considerations apply – there’ll be a hard inquiry on your credit report, and you’ll need to make sure that you can keep up with the future repayments to repair your score effectively. Just make sure you’re finding the best auto loan for your needs, which could go a long way to reducing your repayments. Here’s how to find the right auto loan for you.

How to minimise the impact on your credit score

Although the impact of refinancing on your credit score will usually be minimal, there are still things you should bear in mind to ensure it isn’t a bigger hit than you’d like, and to bring it back up to scratch as quickly as possible: 

• Compare rates in a short time frame. Lenders know that consumers will want to compare several different refinancing rates before making their decision, which is why they won’t penalise you for making several applications for the same kind of loan in a relatively short time frame. Just keep that time frame to days or weeks, rather than months. 
• Stay up-to-date with your repayments. You may be able to speed up the process of raising your score by sticking to the terms of your new loan agreement, which means being absolutely certain that you’ll be able to keep up with your repayments.
• Keep additional credit applications to a minimum. Although applying for a few of the same kinds of loan in a short space of time won’t impact your score too much, applying for several types of finance will. Applying for too much credit is an indication to lenders that you’re struggling financially, so once you’ve secured your refinancing loan, try to refrain from further applications for at least a few months. 
• Check your report. Knowing where you stand in terms of your credit score can be one of the best ways of making sure you keep it in check. This is particularly true if there are errors that need to be fixed in order to bring your report back into good standing, and something where the best credit repair services can help.

Is refinancing worth it?

While it’s true that refinancing a loan will result in a temporary dip to your credit score, the real-world impact on your finances is likely to be small. Unless you’ve repeatedly applied to refinance over the years, a few hard inquiries are unlikely to prevent a lender from offering you finance in the future; they’re far more likely to be concerned with your payment history and credit utilization ratio when determining your eligibility for credit. 

Indeed, the money you could save by refinancing could easily outweigh the negative impact of a slight credit score blip, and provided you stick to the terms of your new credit agreement, you’ll be able to improve it in no time. 

Notice has been served to American taxpayers that time is running out to claim more than $1.3 billion of tax refunds that lay unclaimed from the 2017 tax year. An estimated 1.3 million taxpayers who did not file a 2017 federal income tax return stand to miss out on money they are owed unless they file by the extended tax deadline of May 17.

According to Internal Revenue Service (IRS) estimates, the midpoint for the outstanding refunds is $865 — that means half of the refunds are for more than $865 and half are for less. If those that are owed fail to file a prior tax return for 2017, that money will become the property of the U.S. Treasury. The return must be properly addressed, mailed and postmarked by May 17 to qualify. 

"The IRS wants to help taxpayers who are due refunds but haven't filed their 2017 tax returns yet," said IRS Commissioner Chuck Rettig. "Time is quickly running out for these taxpayers. There's only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return."

The US states owed the biggest 2017 tax refunds

The agency also reveals that taxpayers in some states are owed far more in tax refunds than in others, providing an even bigger incentive for residents to acquaint themselves with the best tax software. 

How else could taxpayers miss out

The IRS also warns that by not filing a tax return, low- and moderate-income workers could miss out on Earned Income Tax Credit (EITC), which for 2017 was worth up to $6,318. 

The relevant EITC thresholds for 2017 were:

• $48,340 ($53,930 married joint filers) for those with three or more qualifying children;
• $45,007 ($50,597 married joint filers) for people with two qualifying children;
• $39,617 ($45,207 married joint filers) for those with one qualifying child, and;
• $15,010 ($20,600 married joint filers) for people without qualifying children.

Anyone about to file for the first time and Americans who are eligible for the COVID-related relief provided by stimulus checks but wouldn’t normally file are also reminded of the need to file a 2020 tax return to claim the Recovery Rebate Credit, which will make good on money they may have missed out on under the first and second stimulus payments. 

Knowing what is and isn’t taxable is crucial to getting your tax return right the first time. But this year, there’s a new question that many tax filers want answering, and that is ‘are stimulus checks taxable?’

By now, most taxpayers will have received three stimulus payments over the course of the past year, with the main intention of supporting the pandemic-affected incomes of Americans. And that’s where the doubts can creep in when sitting down with your tax software - your household has had these financial boosts, but should the money received from stimulus checks be included when filing your tax return? 

Are stimulus checks taxable? 

In short, the answer for those wondering is no, stimulus checks are not taxable. As the IRS succinctly explains on its website, a stimulus payment “is not income and taxpayers will not owe tax on it.”

This means that the funds you’ve received from stimulus checks are “not includible in your gross income. Therefore, you will not include the payment in your taxable income on your federal income tax return or pay income tax on your payment.” 

The agency also confirms that stimulus checks by themselves should not reduce your tax refund or see any increase in the amount that you might owe when you file your 2020 tax return. 

Importantly for some, neither the previous two stimulus payments, nor the third stimulus check which is being disbursed now, affect the eligibility for federal government assistance or benefit programs either. 

Why aren’t stimulus checks taxable?

Quite simply, stimulus checks are not taxable because they’re effectively an advance on a form of tax credit, and tax credits cannot be taxed as income. 

However, when it comes to actually filing your taxes, taking a look back at what you’ve received through stimulus payments may be time well spent. That’s because if you’re yet to receive either of the first two relief payments, or you believe you were underpaid, the shortfall that you’re owed can be claimed via the Recovery Rebate Credit when you file your 2020 tax return. If you don’t normally file taxes, you can still claim the Rebate using the Free File program on the IRS site. 

Doing this could be particularly important if you haven’t filed a return for 2018 or 2019, or your circumstances have changed in the past year, perhaps through job loss, having a new baby, or you’ve recently graduated from college. All of these things could mean you’re owed more, but the IRS will only know once you’ve filed your 2020 return, which you now have until May 17 to complete. If you’re due additional stimulus money, this could be added to your tax refund, or alternatively used by the IRS to cover any taxes that you might owe. 

You’ll find the amount you received under your first and second stimulus payments on Notice 1444 and Notice 1444-B respectively, which will have been mailed to you by the IRS. 

What if your stimulus payment was too much? 

If it turns out that, based on your 2020 tax return, the stimulus payments you’ve been paid are more than what you should have received, the good news is that you don’t have to pay the extra money back. 

For example, you may have received $500 for a child who, based on your 2018 or 2019 return, met the eligibility criteria for a child payment. However, if that child turned 17 last year and no longer qualifies, the $500 is still yours. 

Other tax filing reminders

How to treat stimulus checks may have created some tax filing confusion, but it’s far from the only thing that taxpayers need to bear in mind when completing their tax returns. 

In particular, remote workers need to be aware of the rules surrounding home office deductions, which might not run exactly as you’d think. More positively, the IRS has just confirmed that face masks, sanitizers and other expenditure on similar COVID-19 protective equipment is tax deductible.

If you’ve been struggling with unmanageable debt, the chance to reduce what you owe is always going to appeal. Such an opportunity is what the best debt settlement companies have to offer, yet it’s a path that comes with its own drawbacks, not least in terms of how it impacts credit scores. So is debt settlement worth it, and could there actually be options that are better suited to clearing the biggest of debts? 

What is debt settlement?

Debt settlement is the process of negotiating a repayment plan with your creditors to settle your debt for less than the full amount owed. This may be in the form of a reduced lump sum payment, lower monthly repayments, or perhaps a debt discharge. It’s possible to achieve such an outcome yourself, but is usually more readily achieved with the help of a third party, and in particular a service that specializes in settling debt and will negotiate on your behalf. 

When you seek help in this way, you choose which debts you want to settle but will be expected to stop paying your original creditors, and instead make payments to the settlement company while they negotiate. The process can take a long time, particularly if there are a lot of creditors to negotiate with, but once a settlement has been reached – and crucially, you agree to it, which you’re under no obligation to do – the company who’s now handling the debt will make the required payment(s) to your creditors. If you have a long-term repayment plan, you’ll be expected to continue paying the company that has helped to settle things on your behalf an agreed amount until the debt is cleared. 

What are the risks?

Debt settlement may initially sound like the perfect solution. After all, who wouldn’t want to reduce their debts? Yet unfortunately, it’s not usually that simple, and there are many risks to be aware of before you go down this route. 

The first note of caution surrounds the fees involved. Companies engaged in settling debt will usually expect either a flat fee or a percentage charge – which can sometimes be as high as 25% of the resolved debt – so you need to be confident that any settlement will be worth the additional costs involved, and that you’ll have the means to pay the charges. In a similar vein, it’s important to remember that any forgiven debt over $600 is taxable, so even if you’ve been able to reduce the amount you owe, you could still end up owing tax as a result.  

There’s also no guarantee that your creditors will agree to settle your debt, and if you’ve been directing your payments to the settlement service rather than your creditors, you’ll likely have fallen further behind on your repayments without any solution on the horizon. Interest would still have been accruing on your debt during that time as well, together with late fees, and that means you may actually owe more than when you started the process – and debt collection may be an unfortunate next step to repaying your creditors. 

Is debt settlement bad for your credit?

The potential impact on your credit score is arguably one of the biggest risks of all, and something that you need to carefully consider before you go down the settlement route. 

The reason that settlement firms ask you to stop paying your creditors is that an account is usually required to be in delinquent status before settling, and a successful negotiation is less likely with someone who can still pay their bills. But, if you don’t pay your bills, your credit score will be impacted – and if the negotiation process takes a long time, your score could plummet. This means you’re less likely to be accepted for credit in the future, and could also be a particular concern if the creditor won’t settle, and you need to look for alternative ways to consolidate your debt instead.

Even if your creditors agree to settle, any accounts marked as such on credit reports will negatively impact your score, as you haven’t fulfilled your original credit agreement. It’s not uncommon for credit scores to decline by 100 points or more for each settled account, and it can take seven years for those accounts to leave your report. Seeking the assistance of a credit repair service may be able to help things slightly once your debt is settled,  but even then, it can take a long time for your score to recover.

What are the alternatives to debt settlement?

Given the potential drawbacks outlined, it’s always wise to consider alternative options first. One of these is consolidating your various credit commitments into one loan, either through specialized debt consolidation companies, or by looking for the best personal loans to arrange things yourself. The end result should be that you have a single monthly repayment to deal with which in itself can make things more manageable, and ideally you’ll have a lower interest rate, making repayments lower as well. It will almost always pay to make sure you know how to consolidate debt, and to learn more about the differences between consolidating and settling.

If you’ve got credit card debt, opting for a balance transfer credit card could be an option, thereby giving you a set period of time in which to repay the balance without interest compounding your difficulties. Or, if you’re a homeowner, you may also want to consider refinancing using the best refinance mortgage companies – doing so can enable you to release some of the equity in your property that can be used to pay down your debt – or by using a home equity loan if you don’t wish to switch away from your current mortgage deal. 

Of course, none of these actually reduce the amount of debt you owe, and will often only be an option if your credit rating is good enough to allow. Importantly, however, they are solutions that will have less of a long-term impact on your credit score and your finances as a whole than settlement, so should always be explored first. 

Is debt settlement worth it?

With all of this in mind, the overriding takeaway should be that debt settlement will almost always be  a method of last resort - this is because the impact on credit scores is usually severe, the fees are often high, and there’s no guarantee of reaching an agreement with creditors that will see your debt drastically reduce. 

That said, if a poor credit rating means consolidation and other loan options aren’t an option, there is a possibility that debt settlement may be able to help. However, making sure fees won’t negate any benefit that might be made is a must, and the potential damage to your credit rating should never be underplayed. 

Personal protective equipment bought to prevent the spread of COVID-19 can be treated by taxpayers as tax deductible medical expenses, the Internal Revenue Service (IRS) has confirmed. While the ongoing effects of the pandemic have already persuaded the agency to extend the tax season by a month until May 17, now taxpayers are being afforded the opportunity to deduct expenses against some of the additional spending that the health crisis is likely to have caused. 

“The purchase of personal protective equipment, such as masks, hand sanitizer and sanitizing wipes, for the primary purpose of preventing the spread of coronavirus are deductible medical expenses,” the IRS said in a statement.

How to qualify

Under the new advice, the IRS says the cost of protective equipment bought for use either by the taxpayer, their spouse, or their dependents that is not compensated for by insurance is deductible under § 213(a) provided that their total medical expenses exceed 7.5% of their adjusted gross income. Any such equipment purchased since January 1, 2020 is eligible for inclusion, the agency stated. 

It was also confirmed that purchases of personal protective equipment are eligible to be paid or reimbursed under health flexible spending arrangements, health savings accounts, Archer medical savings accounts or health reimbursement rearrangements. However, they would then not be eligible as a tax deduction, because such plans and accounts already are typically funded by pre-tax contributions.

The news comes a month after the IRS confirmed that eligible teachers can deduct unreimbursed expenses for protective items bought to prevent the spread of coronavirus in the classroom. As well as face masks, disinfectant, hand soap, and disposable gloves, educators can also claim for tape, paint or chalk to guide social distancing, physical barriers such as clear plexiglass, and air purifiers. Purchases made after March 12, 2020 are eligible for the deduction of up to $250.  

Other IRS COVID-19 advice

Amid the challenges created by the health crisis and a backlog of paper returns, the IRS has been urging Americans to file taxes online this year. The agency has been particularly clear in its advice that e-filing on its website or employing the best tax software is definitely the best option if people wish to avoid unnecessary delays in receiving their tax refunds. 

Although this latest announcement could allow some Americans to claw money back on the outlay they’ve made on protective equipment, other deductions that filers may believe will apply to them because of how their lives have been affected by COVID-19 could have to think again. In particular, anyone who has been working from home the past year due to coronavirus may believe they are entitled to home office deductions - the reality, however, is that this deduction is only generally available to the self-employed, and not those who are employed but have recently been working remotely.

Americans have been urged to be on their guard against scammers after it was revealed over $200 billion had been lost to identity theft and tax scams in the past year. Unemployment fraud was overwhelmingly the biggest problem facing the authorities and unsuspecting Americans, and accounted for most of the missing money, while the not-insubstantial amount of $4.2 billion was lost to online scams. 

And with tax season usually the prime time for unfortunate filers to uncover identity theft, including unemployment fraud which can result in tax complications and additional identity theft, another $2.3 billion fell into unscrupulous hands because of tax identity theft. Even pandemic-related relief measures such as stimulus checks have been taken advantage of at a cost of $370 million. 

How to fight back against identity theft

Warning that the extended tax season only gives even greater opportunity for fraudsters, Donna Parent, chief marketing officer at Sontiq, the company behind the analysis, said “new victims right now may not find out until tax time next year”. 

To help counter the threat posed by identity theft and tax scams, people are being encouraged to take appropriate measures to help limit the risk of falling prey to scammers. Here’s the steps you should take to try and protect yourself, your family, your assets, and your credit from tax identity theft:

1. File taxes early

Most people are unaware that they or even their children have fallen foul of tax identity theft until they’ve loaded up their tax software and had their tax returns denied on the basis of submitting duplicate or previously filed information. Scammers tend to get to work quickly once the tax season opens, meaning it can go unnoticed for months until the IRS rejects your return. Identity thieves also use this method to steal children’s identities to claim additional tax credits. 

2. Request an IP PIN from the IRS

If your tax return is turned away as a duplicate, you’ll need to file an IRS Form 14039, Identity Theft Affidavit. That way, going forward, you may be eligible for an IRS Identity Protection PIN, which should prevent scammers from being able to file under your name. 

3. Don’t share personal information via email or text

While taxpayers are being urged to file online this year to avoid delays in getting refunds, take note that the IRS will never contact taxpayers by email or even by phone. If you receive an email or call purporting to be from the IRS, it’s almost certain to be a scammer trying to garner the type of personal information that will allow them to file under your name. 

4. Take care using public Wi-Fi 

If you use public Wi-Fi, it’s always best not to visit sites that require a username and password, or ones that hold your personal information, such as health insurance data, banking and credit card numbers, or credit report results. If you must connect, ensuring you have mobile security features in place is essential, including VPN services, on your mobile device for added protection. 

5. Protect your personal identity

Investing in the best identity theft protection services is almost always a wise decision to safeguard your household against fraud. Such services can also help you to put the damage right if the fraudsters still manage to somehow get through.  

Around 67% of Americans still don’t have a will, despite COVID-19 delivering a fresh perspective over the importance of estate planning for people of all ages. That’s the rather worrying headline statistic to be taken from the latest Caring.com survey, which found that it is only the younger generations that have increasingly been putting formal will arrangements in place in the past year. 

Indeed, the proportion of American adults of any age with a will has actually seen a notable decline in recent years, with 42% of all adults having one in place in 2017, compared with just 33% now. This is particularly surprising given that two-thirds of those polled believe that having a will is “somewhat” or “very” important, and that the rise of the online will maker means it's easier to plan your estate now than ever before. 

How has COVID-19 impacted estate planning?

The coronavirus pandemic may have encouraged people across the globe to more keenly consider their finances, but it doesn’t appear to have translated into action as far as wills are concerned. Indeed, despite more Americans now discussing wills with their loved ones, the proportion of those who actually have a will hasn’t changed substantially from a year ago, with this year’s figure only a slight uptick from the 32% of respondents who had a will in 2020. 

At first glance, the lack of yearly change indicates that the pandemic hasn’t caused Americans to reconsider their estate planning requirements, with only a third of respondents to the survey saying it had made them see a greater need for a will, and most of those not actually starting the process quite yet. Yet this isn’t the case across all demographics, and perhaps surprisingly, the pandemic has encouraged one age group in particular to plan ahead – those under the age of 35. 

Younger Americans are getting the will message

Indeed, the study found that 27% of those aged 18-34 now have a will, up from just 16% a year ago. Over a third (35%) of this age group also said they were specifically motivated by COVID-19 to start engaging with the estate planning process, and many of them obviously followed through. This is in stark contrast with older age groups, among whom just 23% of those aged 35-54 and 16% of those aged 55+ were motivated by the pandemic to begin estate planning. What may surprise even more with these age groups is that they’ve actually seen a decline in preparation in the last year, with just 22.5% of those classed as middle aged and 44% of those aged 55+ now having a will, down from 27% and 48% respectively a year ago. 

The pandemic has been a key driver of this behavioural change, and with there being no definitive way of knowing who COVID-19 would irreparably impact, young Americans have been fuelled to think more about the future and focus more heavily on estate planning. This means that those aged 18-34 are now more likely to have a will than their middle aged counterparts, but it also shows that those who are most in need of having a will are increasingly unlikely to actually have one.  

“There has been a greater focus on estate planning by younger Americans due to COVID-19,” says Patrick Hicks, Head of Legal at Trust & Will. “In many ways, the pandemic forced Americans to consider a new perspective on estate planning. Many younger Americans had delayed creating an estate plan by assuming (incorrectly) that estate planning is only for older people and not relevant for young, healthy people. The unknown aspects of COVID were an unexpected shock that helped many younger Americans realize that estate planning is important precisely because you can never know what the future may bring. Having a plan in place is one small step to protect yourself and your family from otherwise uncontrollable risks.”

Why people don’t have a will...

While it’s undoubtedly good news that the younger generation is beginning to realise the need for proper estate planning, the fact remains that far too few Americans are suitably prepared. Worryingly, this clear disconnect between intention and actuality could have long-term consequences, potentially meaning that estates could go to people the deceased never intended to benefit. 

By far the biggest reason for failing to arrange a will was simple procrastination, with 34% of those questioned admitting that they simply hadn’t gotten around to it yet. Just over a quarter (28%) felt that they didn’t have enough assets to leave to anyone, 8% said they didn’t know how to go about making a will, and 6% said estate planning was too expensive. 

...and why you should have a will

In reality, there are numerous reasons why you should make a will, not least to make sure that your estate is passed on to those you love in the manner in which intend. Having a will in place can also shorten the probate process that your family must go through and help limit estate tax liability. The rise of online will makers also means it needn’t be complex or expensive to arrange a will, particularly as you can set down your wishes at your convenience and without the expense of a legal professional. 

“The pandemic has led many to look for estate planning services that are accessible without going into office buildings or public spaces,” adds Patrick Hicks. “For each of these, COVID has accelerated trends that were already in place. We expect to see these trends continue even after the impact of COVID-19 becomes less acute.” 

You can be safe in the knowledge that your intentions will be acted upon and your loved ones provided for, too - online wills are perfectly legal once signed and witnessed correctly, and don’t always need to be notarized, so really are the ideal solution. 

For additional peace of mind, now could also be the time to look into final expense insurance, thereby ensuring your loved ones needn’t face the prospect of funding your funeral and burial costs. If combined with the right life insurance, you can ensure your beneficiaries will be financially secure after you’re gone too. 

Tax refunds can be delayed for a whole range of reasons in even the most straightforward of tax seasons, but this year, there’s the small issue of a global pandemic to contend with as well. There’s already a backlog of returns that the IRS is working its way through which could be why your refund has been held up, and if you filed a paper return, you’re particularly likely to face a delay. Yet even those who used the best tax software and filed online may be waiting longer than expected this year, so just why are tax refunds delayed?

Will tax refunds be delayed in 2021?

There’s a fairly large chance that your tax refund could be delayed this year, with the IRS admitting that it’s taking longer than usual to process returns, particularly those that have been mailed. This is mainly due to the impact of COVID-19, with it taking the IRS longer to process mailed documents as a result. 

Indeed, there was already a backlog of last year’s paper returns from when offices were closed, so if you’re mailing in your return this year, you can expect to get your tax refund late – and there isn’t even an estimate of how long it could take for it to be processed. This is why Americans have been encouraged to file their taxes online this year, but even here, you may be waiting longer than expected in some cases. 

How long does IRS processing usually take?

Under normal circumstances, a tax refund will typically be issued within 21 days of the IRS accepting your return, which is within three days if you file electronically, or up to three additional weeks if you mail it (as the IRS has to manually enter your details into the system, hence the extra time). If you’ve requested a check instead of a direct deposit, your refund could take an additional week to appear. 

This year is different, of course, but even without the pandemic impacting timescales, there are other factors that could lengthen IRS processing times. These include if you’re claiming certain credits and the IRS needs additional information, in which case you’ll receive a letter asking for those details (though again, if you’re mailing back additional correspondence, be prepared for further delays).

You may also be waiting longer than anticipated if you file particularly early or late in tax season, both of which are high traffic periods for the IRS, when processing times can be impacted accordingly. Additional security measures can also lengthen timescales for some people, such as if the IRS suspects someone has submitted a fraudulent return in an attempt to steal your identity, in which case they’ll have to conduct a full investigation before your return can complete. 

And, if there are errors on your return, the process is likely to take longer too, particularly as the IRS may need to get in touch with you for further clarification. Perhaps you've been confused by the home office tax deduction rules or simply input a wrong figure that's thrown all of the calculations out of line? If you need to file an amended return too, this will always be done on paper, further adding to your tax refund delay. This is where the best personal finance software and tax programs can really come into their own, helping you avoid mathematical errors and ensuring your return is as clean as possible. 

How to check on your refund status

If your tax refund is late there’s not a lot you can do to speed things up, particularly if you mailed it. However, you can check on the status of your tax refund by heading straight to the Where’s My Refund? tool on the IRS website or by downloading the IRS2Go app. Be prepared with your social security number or ITIN, your filing status and exact refund amount, and both options will let you check where your refund is in the processing system, from receipt to completion. 

However, the IRS asks that eager taxpayers refrain from calling to see where their refund is; you should only call if it’s been 21 days or more since you e-filed, or if you’re told to contact them on checking the status of your return. If you mailed your return, you shouldn’t call to check until at least six weeks have passed since you mailed it. 

Also, don’t send a second return, as this can cause further delays. If, however, you’ve been asked to send an amended return, you can use the Where’s My Amended Return? tool to check on its status – though be prepared for a lengthy wait, and don’t call to request additional information until at least 16 weeks after you mailed it.

It can be frustrating waiting longer than expected for your tax refund to arrive, particularly if you’re relying on the money to boost your finances, perhaps as a down payment to take advantage of the best mortgage deals, pay down debt, or even dip your toe into the potentially lucrative waters of online stock trading. The key message, however, is to be patient – tax refund delays will unfortunately be commonplace this year, and if you’ve yet to file your return, make sure to do it online and, ideally, well before this year’s extended deadline of May 17. 

Around 2 in 5 Americans have been selling items online during the past year, after the COVID-19 pandemic led to people spending more time at home and sometimes needing to find new sources of income.

In all, 38% of those questioned as part of a new MagnifyMoney survey said they had sold something online within the last year, inspired by a combination of conditions that provided the opportunity to declutter their closets and try to make some extra cash in the process. 

Incredibly, those who have been selling household items online during the pandemic said they had made an average of $1,810 in total, easily outstripping the $1,400 that eligible Americans could be paid under the third stimulus check. 

How online sellers use their profits 

For half of those questioned, the extra money has proven invaluable in helping to keep their household finances afloat during the pandemic. Some 26% of online sellers used profits to pay off debt on personal loans, credit cards, auto loans, and the like, while 24% spent the funds on household expenses, such as food, rent or their mortgage.  

By far the most popular use for the money raised, however, was adding to savings, with 57% of online sellers choosing to put the funds aside in their banks for a rainy day. Just 13% felt comfortable enough in their financial situation to splurge the profits on extravagant purchases as a form of treat. 

What are people selling online?

Perhaps unsurprisingly, clothing easily tops the list of items people have been selling online, with some 52% of sellers moving on garments that they no longer wish to wear. In a similar vein, 31% have been providing competition to the best online shoes stores and selling their old footwear online. 

The same proportion - 31% - have been selling furniture online, perhaps to simply clear out their garage or maybe to make way for the new home office they’ve required while working remotely. Jewelry or accessories (27%), home decor (24%), and toys (20%) have all proven popular items to sell online too. 

Where to sell items online

When deciding what to do with the household items they no longer need, 41% of Americans still choose to donate their things to charity. However, close behind are the 30% who now automatically turn to selling online, spurred on by the rise of the best online auction sites and social media making it easier to showcase your wares to a wide audience.

While once upon time, eBay was one of the only ways for online sellers to go, the resale marketplace is still the platform of choice for 39% of those selling online, but now finds itself in second place behind Facebook Marketplace, which 58% of online sellers appear to consider a better place to find buyers. Adding weight to the suggestion that many Americans enjoy selling items on social media, Instagram is now the first choice for 38% of those looking to sell items online. 

“There are a growing number of apps and websites dedicated to reselling, plus growing interest in sustainable shopping and vintage finds,” says Kamaron McNair, editorial assistant at LendingTree. “But, of course, reselling an item requires that the seller already own the item. That means if you didn’t buy something expensive (that you don’t need to keep), it’s less likely you’ll be able to earn a large profit from what you can sell.”

American taxpayers have an additional month in which to file their taxes after the Treasury Department and Internal Revenue Service (IRS) confirmed the federal income tax deadline 2021 has been extended from April 15 to May 17. 

In a move reminiscent of that seen last year, when the deadline was extended by three months due to the challenges created by COVID-19, the IRS Commissioner Chuck Rettig said the service wants “to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities."

How the tax deadline extension could affect you

The announcement means individual taxpayers, including those who pay self-employment tax, can now leave their tax software untouched for a further month if they so wish, without incurring penalties and interest, and regardless of the amount owed. 

Importantly, however, the postponement doesn’t apply to estimated tax payments, which are still due on April 15. While most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer, some people whose income isn't subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income, must make estimated tax payments to the IRS quarterly.

While taxpayers do not need to take any action to benefit from the deadline extension, those who would like additional time to file beyond the May 17 deadline can request a filing extension until October 15 in the usual ways, by filing Form 4868 through their tax professional, tax programs or using Free File on the IRS website. As per any year, however, this does not grant taxpayers an extension of time to pay any taxes that they owe to October 15 - these will need to be taken care of by May 17 to avoid interest and penalties.

The extension does not automatically apply to state filing deadlines either, which vary and do not always align with the federal filing deadline anyway. Taxpayers are advised to check with their state tax agencies for their relevant deadlines.

Reasons to still file early

Despite the extra leeway, the IRS remains keen for taxpayers to file taxes online as soon as they can, particularly if they are due a refund - those who e-file can generally expect to see their returns issued within 21 days. Recent research shows that over half of Americans are relying on a tax refund to help boost their finances this year, with putting the money aside in savings and paying down debt on credit cards and personal loans the main uses they have in mind.  

With the IRS currently in the process of distributing stimulus check 3 to eligible Americans, and also making good on any money that people may still be owed for the first two relief payments, taxpayers have also been urged to file early to make sure the service is aware of their latest circumstances and direct deposit details.

“Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to," said Chuck Rettig.

If you have acquired a large amount of debt in recent years across a number of different loans, paying it off can seem a difficult and daunting task and staying motivated can be a struggle. Fortunately, there are strategies you can employ to help prioritize these debts and achieve your financial goals more quickly. These strategies broadly fall into two categories – paying off the loans with the highest interest rate first or focusing on the smallest debt first. 

When using either one of these, it is crucial that you continue to keep up with the minimum monthly payments on each of your remaining loans to avoid being stung by extra charges and higher interest rates. 

Paying off the highest interest rate loan first

When considering which loans to pay off first, one option is the “debt avalanche” method. This involves putting as much extra cash as possible toward the loan with the highest interest rate, while continuing to meet the minimum monthly amount on your other loans. The biggest advantage to this method is it has the potential to save you a substantial sum in interest over the long-term. 

Once the most expensive loan has been paid off in full, all of the money you were putting toward it each month can then be used to start paying off the loan with the next highest interest rate. Again, you must keep up with the minimum payments on your remaining loans. You continue this process until all of your loans have been paid off.    

As an example, let’s say you had the three loans below:

• Personal loan A of $8,000 at 10%
• Personal loan B of $10,000 at 12%
• A student loan of $5,000 at 6%

Here, you would focus on putting extra funds toward personal loan B first, then once that had been paid off, your focus would turn to personal loan A, and finally to the student loan.

Paying off the smallest loan first 

While paying off the most expensive debt first has many benefits, if your most expensive loan is also your biggest one, it can take a considerable amount of time to clear and it can be easy to lose motivation as a result.   

Many people therefore favor the “debt snowball” method. This involves paying off the smallest loan first, no matter the interest rate, and although you’ll likely end up paying out more interest overall, the results can be more tangible, giving you a bigger sense of achievement. Each time you pay off a loan, you’ll be one step closer to your financial goal of becoming debt-free and this can help keep the momentum going. 

Additionally, the faster you pay off your debt, the better it is for your credit score and your debt-to-income ratio. This can be particularly beneficial if you are hoping to qualify for credit such as a mortgage in the near future. 

Prioritizing your loans

Regardless of which method you feel will work best for you, certain riskier loans should always be prioritized above all others. Both payday loans and title loans fall into this category as they are short-term loans that charge excessively high rates of interest. Payday loan rates can be close to 400%, while title loan rates are often around 300%. 

If you are unable to pay off your payday loan or title loan at the end of each month, many lenders will simply roll them over into a new loan, resulting in further fees and interest being added and starting a cycle of debt that can be difficult to escape. Those with title loans also risk losing their vehicle if they cannot repay the loan. For these reasons, paying off these riskier loans first is an absolute must. 

Once these have been cleared, you can turn your attention to paying off personal loan debt, alongside any credit card debt you may have. A quick and easy tactic to help pay off credit card debt is to move your balance to a 0% APR balance transfer credit card as this will allow you to avoid paying interest for a number of months.

This will only work, however, if you are able to clear your credit card debt before the 0% introductory APR period ends as it is after this point that you will start paying interest at the standard rate. You will also pay a transfer fee of around 2% to 5% of the balance when you move it across and the best credit cards will only be offered to those with good credit. 

Loans such as student loans or home equity loans may be pushed further down the priority list as these can give you a tax break on the interest that you pay. Mortgages and business loans can also take more of a backseat as they are generally regarded as “good” debt due to their potential to make you better off in the long run. 

What about debt consolidation?

If paying off loan debt feels too overwhelming and you’re concerned about managing your various repayments, you may want to consider the best debt consolidation companies as another option. These services enable you to combine all your existing loan commitments (and any other forms of credit) into a single loan with a single monthly payment. 

This can make the process far more manageable and saves you from assessing which debts should be paid off first. Furthermore, if you can secure a lower interest rate your monthly payments could shrink and you will save money in the long run.

Alternatively, if you have already explored this option and you are struggling under the weight of your debt repayments, the best debt settlement companies may be able to help. These services negotiate with your creditors with the aim of reducing the amount you owe and hopefully establishing a repayment plan that you’re more likely to achieve. However, they should only be used as a last resort and it is wise to seek professional help first. We recommend speaking to National Debt Relief which offers a range of services to help customers manage their finances and find the right debt resolution option. 

A will is a legal document that allows you to detail how you would like your property and estate to be distributed when you die. Wills are not just for the rich and wealthy – no matter how much or how little you own, creating a will ensures your assets will be passed on as you intended. 

Why should someone make a will?

According to a recent survey, 68% of Americans do not have a will. Yet if you die without making a will – known as dying intestate – state law will govern who gets your property and assets. This can result in loved ones missing out and your estate being passed on to someone you did not intend – such as an estranged relative. Not having a will can also cause family strife at an already difficult and emotional time. 

By creating a will, you can help ensure your family and loved ones do not have to waste extra time, money and energy settling your affairs. 

Creating a will enables you to:

Be clear about who gets your assets
You can outline who gets what and how much. Not only will this ensure your assets don’t fall into the “wrong” hands, spelling out your wishes can also help to minimize family disputes. You may also want certain assets placed in trust for the benefit of your children. 

Detail specific bequests
If you wish for certain family members or friends to receive financial gifts or particular items – for example, an expensive painting or diamond ring – a will can provide for these.   

Protect your life partner
If you live with a life partner but have no marriage, civil union, or domestic partnership certificate, your partner won’t stand to inherit unless you have a will. Instead, if you have no children, state law will usually dictate that your closest relatives will be the beneficiaries of your property. 

Decide who should take care of minor children
A will allows you to nominate who should look after any children you have if you die while they are young. Without a will, the court will make that decision on your behalf. 

Reduce estate tax liability
The value of what you give to family members or charity will help to reduce the value of your estate and offset estate tax. As of 2021, federal estate tax is due if an individual estate’s value is more than $11.7 million. 

Choose your executor
An executor is the person you nominate to deal with your estate when you pass away. As part of this, your executor may have to pay off bills, close financial accounts and notify banks and other financial organizations. You’ll therefore want to ensure your executor is someone you fully trust. 

Avoid a lengthy probate process
All estates must usually go through probate, even if there is a will. However, if you have a will, this can help save both time and money and allow your beneficiaries to get access to your assets more quickly. 

When should you write a will?

Most states in the United States require you to be at least 18 years old before you can create a will. After that point, it’s ultimately up to you when you choose to write your will, but there are some key life events that should prompt you to consider it.

For example, it is sensible to write a will if you are:

• Buying a house
• Moving in with a partner
• Getting married
• About to have children

Even if you are single and do not have children, a will can still be important if you have acquired substantial assets as it will ensure these are passed on to the right people in the event of your death.

Once you have a will in place, it is important to regularly review it to check it still accurately reflects your wishes. You may wish to amend your will if, for example, you get married or divorced, you have another child or you acquire more property. 

How to write a will

The best online will makers are a quick and convenient way of creating your will and can be a more affordable alternative to approaching a legal professional. Such software will also usually allow you to alter your final wishes whenever you see fit, so you can avoid paying for repeat appointments with a law expert. 

What’s more, providing your will meets all the requirements of the state where it is executed, creating a will online yourself will be legal and just as valid as a will drafted by a legal professional. 

Step-by-step instructions will usually be given to guide you through the process, but you can expect to provide details such as:

• Your name and address
• Your relationship status and name of spouse (if applicable)
• Name and birth dates of any children
• Proposed guardians for your children
• Who should act as executor
• A list of your assets
• Specific bequests

Note that if you have a particularly complex estate, hiring a legal professional is usually a safer bet than using an online will maker as it will ensure everything has been considered and ordered correctly. You should also hire a lawyer if you want to disinherit a spouse.

Although wills do not need to be notarized, in most states it can be worth including a self-proving affidavit to your will to avoid delays when distributing your estate. This is a short note to say the will was fully executed and allows your will to be “proven” to the probate court. 

Additional financial protection 

Creating a will is just one part of ensuring your loved ones are financially protected when you pass away. It is also worth looking at the best final expense insurance to ensure the cost of your funeral and burial does not become the responsibility of your family, while the best life insurance policy will give peace of mind that your loved ones’ finances will be secure when you’re no longer around.

Private mortgage insurance (or PMI) is unfortunately a fact of life for many who take out even the very best mortgages, with it being intrinsically linked to the level of equity in your home. If it’s been part of your outgoings for a few years, you’ll likely have one question on your mind – can mortgage insurance be canceled? The short answer is yes, but you’ll need to meet certain criteria first. 

What is mortgage insurance? 

PMI is an insurance product that will repay your mortgage if you’re unable to. It’s designed to protect the lender in the event of default, as with this kind of insurance in place, they’ll still get the majority of the money owed to them, even if you can’t pay it. Given that mortgage insurance premiums can cost anywhere from 0.3% to more than 2% of your mortgage balance (depending on various risk factors), it can easily add hundreds of dollars to your monthly repayments, so it’s little wonder that so many Americans want to get rid of it.

It’s something that can affect a lot of borrowers, too. A policy will usually be required if you make a down payment of less than 20% on a conventional mortgage loan, or if you’re refinancing and have less than 20% equity in your property. This is because the higher the loan-to-value (LTV) of the mortgage, the more risk the lender is taking on, and they’re looking to protect their investment accordingly. But, once you hit that magic 20% mark, you can start the process of getting PMI canceled. 

When can mortgage insurance be canceled? 

Once your level of equity reaches 20% and your mortgage balance falls to 80% LTV, you can request that your loan provider cancels the PMI contract as per the federal Homeowners Protection Act (HPA). You’ll have to do this in writing and will need a good payment history, and you may also be required to get a home appraisal to ensure that your home’s value hasn’t declined. But, if you tick all the boxes, you may be able to cancel your PMI contract and reduce your repayments in the process. 

It’s possible to get to this stage quicker by overpaying on your mortgage, or if you’re not in such a rush, you can wait for it to happen automatically. Provided you haven’t missed any repayments, the HPA states that the provider must terminate a PMI contract either once the mortgage balance reaches 78% of the original purchase price (automatic termination), or at the midpoint of the amortization schedule, if sooner (final termination). This means that, if you’ve got a 30-year mortgage term and you hit the 15-year mark, the insurance policy will be canceled, even if you haven’t fallen below 80% LTV. Again, to be eligible for either of these scenarios, you need to be up-to-date with your payments. 

Another way to reach that key point is to get your home reappraised if you believe it’s increased in value. If it’s been five years since you purchased the property the LTV must be no more than 80% for the insurance to be canceled, but if you’ve only owned your home for two years, 75% LTV is the maximum. However, remember that getting an appraisal can cost a lot of money in itself, so you’ll need to be confident that your home has gained in value – if properties in your area have seen price rises, for example, or if you’ve made a lot of improvements – to work out if it’ll be worthwhile. 

In a similar vein, refinancing your mortgage could be a way to remove the PMI if you find that, on appraisal, you’ve gained 20% equity ahead of schedule. This could be a particularly prudent move in the current low-rate environment; not only could you potentially take hundreds of dollars off your mortgage payment each month by refinancing to a lower rate, but you could save even more by removing PMI from your mortgage contract. As with the reappraisal route, just make sure that the fees associated with refinancing won’t make the endeavour unprofitable. 

Is mortgage insurance required?

If you're wondering is mortgage insurance required in the first place, and you want to avoid mortgage insurance altogether, one of the best ways to go about it is to put a larger down payment on your home. If you can put down more than 20% you’ll have a lower loan-to-value, which should mean the lender doesn’t require you to take out an insurance policy. 

Yet don’t be so focused on avoiding PMI that you fail to leave yourself any financial liquidity. Having some spare cash lying around for emergencies is always recommended, so when working out what mortgage you can afford, try not to spend every last cent on making a bigger down payment if it’ll mean you’re struggling afterwards. Besides, for some, that extra amount each month could be a small price to pay for getting on the property ladder, with many finding that even with PMI added, they’re still paying less than they would have been on a rental contract. 

And, if you’re not in a position to avoid PMI at the outset, you may like to consider ways you can reduce the cost of such a policy instead, which means understanding the various risk factors that go into a PMI calculation. These include your mortgage term, LTV ratio and the amount of cover required by the lender, as well as your credit score. You’ll already need a decent score to be approved for a mortgage, particularly now that the credit score needed for such an approval has risen, and typically speaking, the higher your score, the lower your PMI premium is likely to be. This means now’s the time to seek credit repair services if your score could do with a refresh.

Yet even if you end up paying more in the way of PMI than you’d like, remember that it won’t be forever – there are several ways that mortgage insurance can be canceled, and after a few years, you can look forward to spending the premiums on something far more enjoyable. 

More than half of Americans have said they are relying on a tax refund this year, with adding to their savings and paying down debt heading up the plans that taxpayers have earmarked their payments for. With the tax season approaching its halfway point, early filers who had their tax software primed and ready to go as soon as the IRS opened its doors for returns may already have received refunds. 

However, in a sign of the times in which we live, 55% of taxpayers told MagnifyMoney that they are counting on a refund from the IRS this year, up from 40% last year. In an even starker illustration of the financial pressures being felt by those with family responsibilities, 72% of parents with kids younger than 18 are counting down the time until a refund lands in their bank account. 

How will tax refunds be spent?

Despite two stimulus payments - and a third stimulus check soon on the way - the pandemic has still seen many households need to lean on savings and borrow money to make ends meet. Unsurprisingly, this is reflected in the way that many Americans intend to use their refunds this year, with nearly a quarter (23%) expecting to spend the money on essential household expenses, such as rent or groceries. 

If they’re in a position to do so, most want to put the money aside (41%) so they have savings to fall back on in the future, while 39% will use their refund to service debt payments on personal loans, and the like. For those in a more comfortable financial position, the percentage who said they’d put their refund towards stock trading has nearly doubled, from 8% in 2020 to 14% in 2021. 

“If you don’t have an emergency fund, starting one should be the highest priority for your tax refund,” said Ken Tumin, DepositAccounts founder. “If you also have high-interest debt, like a credit card balance, you might want to use the tax refund to both start an emergency fund and to pay off the high-interest debt.”

Getting your tax refund

Whatever the plans you have for your refund, you’ll obviously need to file your tax return before you get it. The deadline this year is April 15, and if you do as the IRS recommends, and file your taxes online, most refunds are processed within 21 days or will arrive even sooner. However, if you opt to have your payment sent via check in the mail, rather than direct into your bank account, you’ll almost certainly be waiting longer. 

With the survey revealing that almost half of filers (49%) have made a mistake on their taxes before, also be aware that there’s likely to be a delay to correct any errors on your return. Given the rise of remote working in the past year, one area that seems set to cause confusion are the rules surrounding home office deductions. 

Although such deductions only apply to self-employed workers (who still need to meet other criteria), the survey found that 40% of non-self-employed remote workers mistakenly believe they’re eligible to deduct home office or business expenses on their tax returns.

The American cities whose citizens lay claim to the highest credit scores - and the lowest - have been revealed. Following a pandemic-affected year during which borrowers increasingly paid down debt to the general benefit of their credit scores, it is the residents of The Villages, Florida, who can boast the highest median credit score of 807. As a result, they’re better placed than anyone else in the US to access the best personal loans, mortgages and credit cards around right now.

Credit scores overall have widely improved during the health crisis due to consumers cutting back on their spending, putting their stimulus checks to good use either to keep on top of debt or pay back what they already owe, and by taking advantage of the various debt relief concessions that have been introduced to help people manage their finances. 

The cities with the highest credit scores

Published by WalletHub, the report takes in almost 2,600 US cities, of which some 267 have a median credit score of at least 750 - the mark beyond which borrowers are accredited as having Excellent credit, and so should be able to take advantage of the lowest home loan rates from the best mortgage lenders, and the most favorable credit terms generally. 

After The Villages, the next-best credit scores are found in Sun City West, Arizona and Sun City Center, Florida, which both have an average of 789, while Green Valley, Arizona isn’t far behind with 788. The two California cities of Los Altos and Saratoga come next with 784, followed by Lexington and Needham, both Massachusetts, and Laguna Woods, California, at 781. Pittsford, New York and Mequon, Wisconsin complete the top 10 with a median score of 780. 

The cities with the lowest credit scores

On the other side of the coin, it is the residents of Chester, Pennsylvania, East St Louis, Illinois, and Camden, New Jersey, who report the lowest credit scores right now, of just 552. With any score below 579 rated as Very Poor, those with such a low rating might expect to pay additional fees when applying for credit cards, and be offered far less favorable rates and terms on other forms of credit, if they qualify to borrow at all. 

Detroit, Michigan is only slightly better at 560, while Gary and East Chicago, both Indiana, are next worst at 561 and 564 respectively. Those living in West Memphis, Arizona, and Harvey, Illinois, are not much further ahead at 566, with the low credit scores of all those mentioned, and millions more Americans, likely to present a real challenge.

How to improve your credit score

With the credit score required to secure a mortgage at a 20-year high, and many people still needing to borrow simply to help make ends meet, taking the time to improve your credit score can really pay off. This means regularly examining your credit report, and looking for discrepancies that might be holding your rating back, and is particularly important given the surge in credit reporting errors that was noted last year. 

Some may wish to hand responsibility for increasing their score over to the best credit repair services, while others will prefer to do it themselves. Whichever path is taken, Jamie Wagner, Assistant Professor, Director, Center for Economic Education, Department of Economics – University of Nebraska at Omaha, says the difficult thing with improving credit scores is that there isn’t usually a quick fix. 

“If you are working to improve your score it is going to take several months or years to increase a credit score depending on how low your score starts. My biggest tip regardless of trying to improve your score or not is to pay your credit cards or loan repayments every month. Pay your bills every month - payment history is a large part of your credit score. Additionally, I would recommend stop opening accounts or close accounts that you do not use.”

Consumer complaints about credit report errors more than doubled last year, putting the onus on Americans to monitor their credit ratings and dispute erroneous items if necessary. Around 282,000 complaints related to credit reporting were recorded by the Consumer Financial Protection Bureau (CFPB) across 2020, compared with 136,000 in 2019. 

Of these, the majority of the grievances received were to do with credit report errors, which could hold people back in their applications for personal loans, credit cards, mortgages and other credit. More specifically, 141,000 of the complaints were tagged with the problem “information belongs to someone else”.

Credit bureaus under fire

The study, which was conducted by the U.S. PIRG Education Fund, went on to reveal that the vast majority of credit reporting complaints – nearly 9 in 10 –  involved one of the ‘big three’ credit bureaus. And between them, Experian, Equifax and TransUnion accounted for 246,000 of the complaints the watchdog received overall, making them responsible for more than half of the total received by the CFPB in the whole of 2020. 

A day after the damning report was released, the ‘big three’ announced that they’d continue to provide free weekly credit reports for another year in light of the ongoing financial issues many Americans are facing as a result of the pandemic - normally, free credit reports are limited to one per year, unless you meet certain additional criteria. However, for some, this hasn’t disguised the issue at hand, as Lucy Baker, U.S. PIRG Education Fund’s consumer program fellow, said:

“Mistakes in credit reports lead to lower credit scores and denial of credit, housing or employment, but under President Trump, the CFPB gave the credit bureaus a free pass from handling consumer disputes in a timely manner. That hands-off approach couldn’t have happened at a worse time. It exacerbated family finance problems during a pandemic that had already left many consumers teetering on the edge of financial ruin.”

Why do I need to dispute credit report errors?

If there are errors on your credit report, you could have a lower score without even realising it, which could be holding you back from being offered the best credit terms – and it may even be preventing you from being approved for finance altogether. This is why it’s so important to fix credit report errors, particularly if you’re thinking of applying for finance in the near future. 

It can be especially important when it comes to securing a mortgage, an issue highlighted by the recent finding that the credit score needed to be approved for such a loan has increased. Being approved for the best personal loans will also depend on having a stellar credit score, not to mention credit cards and auto loans; quite simply, if you want to stand the best possible chance of being approved for finance and getting the best terms in the process, it’s vital to make sure any credit reporting errors are fixed as soon as possible.  

How to fix credit report errors

If you suspect that the credit bureaus are holding incorrect information about you, you’ll want to get it rectified as quickly as possible. It’s possible to do this yourself: you can start the process by requesting your free report via annualcreditreport.com, and from there you can analyse the information held about you to spot any inaccuracies.

If you notice an error, write to the relevant bureau with details of the information you think is inaccurate, together with copies of any supporting documents to back up your claim. The bureau then has 30 days in which to investigate, during which time it must forward the data to the organization that originally provided the information in order for them to review it, after which it must either delete, update or verify the information held. 

Yet it isn’t always as simple as that, and it may be the case that the original organization challenges your claim. This is where it can start to get tricky, and is why many people choose to seek specialist credit repair services instead. These companies will deal with the credit bureaus on your behalf to expunge the offending information from your credit history, and typically have much higher success rates than if you were to go it alone. Some can even guarantee an improved rating as a result of their work, so for many, investing in their services could be worthwhile.

An estimated 11 million American households are significantly overdue on their regular housing payments and at heightened risk of losing their homes over the coming months, according to a worrying new report. The more encouraging news is that President Biden’s American Rescue Plan sets aside billions of dollars for rental relief which should ensure the threat of becoming homeless is allayed for the time being. 

The potential scale of the problem has been highlighted by the Consumer Financial Protection Bureau which found that some 8.8 million renters and 2.1 million homeowners were “significantly” behind on their mortgage payments. Black and Hispanic households were more than twice as likely to report being behind on their payments than white households, as were households with incomes below $75,000 compared with those whose income was greater. 

“Some of these households were already behind on their payments before the pandemic began, but many households experienced income shocks such as a job loss, reduced hours, or the death of a family member,” noted the report. 

Renters struggling the most

With 6% of mortgages delinquent as of December 2020, up from 3% in March last year, the number of struggling mortgage borrowers has doubled since the beginning of the pandemic. In a sign of the severe financial stress being felt, most of the delinquent loans were more than three months behind on payment. 

However, through sheer weight of numbers - and particularly given renters only account for just over a third of US households overall - the report suggests that the challenges faced by renters are far greater than homeowners. Perhaps unsurprisingly, low income renters were more likely to report that they were behind, with more than one in four with incomes under $25,000 owing rent.

How the new relief package will help

The report notes that the coronavirus relief afforded by the Government, including stimulus checks, enhanced unemployment benefits, forbearance measures, and moratoriums on evictions, have been instrumental in ensuring millions of Americans have not lost their homes during the health crisis. 

However, with the ban on evictions expiring at the end of March, and additional support measures for the unemployed ending mid-March, attention inevitably turns to the latest rescue plan which has been passed by the House, but still needs Senate approval. A further $26 billion has been earmarked to help renters, and another $10 billion for mortgage assistance, along with an extension of the enhanced benefits for those out of work and the promise of a third stimulus check.

What about the eviction ban?

What is notable by its absence is an extension of the nationwide eviction moratorium announced by the Centers for Disease Control and Prevention (CDC) in September last year. Despite calls from President Biden to keep the ban through September 2021, the budget reconciliation path that the American Rescue Plan legislation is taking through the Senate means the eviction extension can’t be included in the bill. The hope now is that the President will move to extend the safeguard through an executive order to avoid the flood of evictions that would inevitably follow if it were to lapse and the wider implications it could have on health and debt.  

“The Biden administration must vigorously defend the CDC order in the courts, and must strengthen, enforce and further extend the eviction moratorium for the duration of the pandemic and until all emergency rental assistance has been disbursed,” said Diane Yentel, President and CEO, National Low Income Housing Coalition. “Evictions risk lives, drive families deeper into poverty, and strain overstretched public health systems. When our collective health depends on an ability to stay in our home, we all have a stake in ensuring that tens of millions of renters don’t lose theirs.”

Qualifying for rental assistance

In terms of the relief for renters that is included in the bill, emergency rental assistance is available if at least one person within a household: 

• has qualified for unemployment benefits or seen a reduction in household income, incurred significant costs, or experienced other financial hardship during the pandemic; 
• can demonstrate a risk of experiencing homelessness or housing instability; 
• has a household income below 80% of the area median income (AMI).

The funds must be used to cover back and forward rent and utility payments, and other housing expenses, but if you’re struggling with your rent, there are other steps that you may be able to take too. 

For homeowners behind on mortgage payments, talking to your lender about your situation is the first thing you should do, while also exploring the other options that may be available to you. Making contact with lenders is good advice if wider debt is taking its toll too, including on credit cards and personal loans.

The US states with the highest and lowest property tax rates have been revealed in a new report illustrating the different tax burdens that households can face, depending on where they live. In analysis, which should prove of interest to anyone looking to move home, Hawaii has the lowest property tax rate at $606, almost 9 times lower than the highest rate seen in New Jersey, where the average household must pay out $5,419 each year. 

Homebuyers should be all-too familiar with the need to pay out for property taxes alongside their usual mortgage payments. And with tax season underway, it’s vital to remember that the property tax deduction is one benefit that homeowners should take advantage of when loading up their tax software to file their returns. 

“Consideration of property tax is not the most exciting part of the home buying process, but it is incredibly important and should always be considered,” Natasha N. Varyani, Associate Professor of Law – New England Law, Boston, told WalletHub, which compiled the data. “Often it is overlooked because it is not included in the list price of real estate, and it is an obligation that will be attached to the property forever.”

The states with the lowest property taxes

The numbers have been crunched using U.S. Census Bureau data, with the real estate property tax rates calculated by dividing the median tax payment by the median home price in each state. The resulting rates were then used to work out the dollar amount of property tax paid on a house worth $217,500 - the median value for a home in the U.S.

While the average American household pays $2,471 on property taxes each year, there are 14 states where bills typically fall below $1,500. Outside of Hawaii, annual property taxes based on the national average home value are next lowest in Alabama at $895, and then Colorado at $1,113. 

The states with the highest property taxes

Taking the dubious honor of having the highest property taxes is New Jersey at an average of $5,419, followed by Illinois at $4,942 and New Hampshire at $4,738. Overall, property taxes in Blue States were found to average $2,722, some 31% higher than the average of $2,076 seen in Red States. 

However, when it comes to calculating the average paid on property taxes for a home priced at a state's median home value - rather than the national average - many residents of New Jersey will be paying well above $8,000 a year.

Renters should take note as well

Although almost two-thirds of Americans are homeowners and explicitly subject to property taxes, renters are being urged to take note of the figures too, because of the impact the taxes can have on rental costs.

“While most home buyers consider property taxes in deciding where to move, renters should also be aware of local taxes and services,” Stephanie Leiser, Lecturer in Public Policy, Ford School – University of Michigan told the website. “While renters may not directly pay the property tax bill, their landlords will bake those expenses into their rent payments.”

And for renters about to file tax returns, it's also worth checking whether property taxes are payable as part of your lease agreement. If they are, it's possible to deduct that portion of your rent or any property tax you pay directly. 

• Find more essential tax-filing reminders for the 2021 tax season

Americans who are working remotely could be losing out financially by carrying out their roles from home rather than at their usual place of work. That’s the perhaps surprising finding of a new report from the National Bureau of Economic Research (NBER) which reveals that employees who work from home spend on average 7% more on housing costs than those who stay in the office.

Hidden housing costs

The figures show that between 2013 and 2017, households with at least one adult working from home spent between 8.4% and 9.8% more on housing costs than non-remote households, largely the result of higher mortgage costs and property taxes. Yet a similar jump was true for renters, who spent between 6.5% and 7.4% more than their office-based peers.

The study suggests that this is due to the fact that remote workers typically have larger houses with a higher cost per room, with the need for extra space becoming apparent to anyone who’s been catapulted into remote working in the last 12 months. 

And, given that the figures were compiled in a pre-COVID era, it isn’t difficult to assume that even more workers could now be feeling the effects of higher housing costs. Indeed, in 2017 a report from FlexJobs revealed that only around 3% of the US workforce regularly worked from home; by May last year, however, this proportion had exploded, with the NBER reporting that half of respondents were doing so, including 35% who’d switched to remote working as a direct result of the pandemic.  

This isn’t a trend that’s likely to slow down any time soon, particularly given the relative ease with which many employers and employees alike have adjusted to this new way of working. Yet this also means that a growing number of Americans are likely to be impacted by rising housing costs, be it through moving to a bigger property - as over a quarter of remote workers have said they’d like to do - or perhaps by renovating their current home if they want to finance a dedicated home office space. But there are ways you can mitigate some of those costs, with the considerations differing depending on whether you’re relocating or renovating.  

Should you move or remodel? 

The first thing to do is be realistic about what you can afford, particularly if you’re considering relocating. Moving to the suburbs may be an option if you don’t need to worry about the commute, but costs are rising here too, and knowing how much mortgage you can afford will be your very first step in deciding whether it’s viable. 

Firing up your personal finance software can be hugely beneficial when working out your level of affordability, and remember too that if you’re moving to a bigger, more expensive property, it follows that homeowners insurance can become similarly more expensive, so always keep these kinds of costs in mind when contemplating your next steps. 

If staying in your current home, but switching it around or adding to it, is more of a viable option for the time being, you'll likely want to know how to finance a home renovation. This will usually depend on whether it’ll be a simple update to a few rooms or a full remodeling project, complete with extension for the home office - the former might perhaps only need a small personal loan, while the latter could require something at the more extreme end of the scale, such as refinancing your mortgage or securing a home equity loan.  

Remember the benefits

The NBER study didn’t delve into the additional expenses of home-working either, such as the cost of new equipment required to create the perfect home office and the endless supply of coffee that employers will no longer be paying for, yet there are undoubtedly some perks to this way of working, too. 

Most will save on travel costs to the office, and are unlikely to miss the time spent stuck in traffic getting there. And while the home office tax deduction is not as wide ranging as it once was, if you’re self-employed, an independent contractor or gig worker working from home, it could still benefit you, when loading up your tax software.

What you can’t really put a price to, however, but what remains valuable about working remotely nonetheless, is the flexibility to quickly step away from your desk and just pop that nearly-ready meal into the oven, or welcome repair workers without needing to take the day off - these are little extras that can make a lot of difference as well. 

Staying on the right side of the Internal Revenue Service (IRS) should always be a priority, but deadlines can easily be missed and mistakes made. If the IRS has been chasing you, or you’re conscious of tax-related tasks that are outstanding from years’ gone by, filing prior year tax returns can help get you back on track. 

Filing back taxes is a little different to how you would file your tax return for the latest tax year, but don’t let this put you off. Fulfilling your obligations to the IRS is almost always best done sooner rather than later, so read on to learn how to file prior year tax returns without delay.  

Reasons for filing prior tax year returns now

When it comes to tax season 2021, you have until April 15 to reacquaint yourself with the best tax software and file your 2020 return, or to ask for an extension. However, if in previous tax seasons you’ve missed the original deadline, or the extended one if you asked the IRS for more time, there’s little time to waste getting your taxes up to date if you want to avoid interest and penalty reprisals, or worse.

Avoid fines or maybe worse

The most likely reprimand for not filing on time are interest charges and late payment penalties. However, if your obligations are left unmet for a long period, this could eventually result in a claim by the IRS to your current and future property, including your house, car or wages, and even criminal charges. 

If you fail to file by April 15 this year - or October 15 if you arrange an extension - you can expect to receive a notice from the IRS by mail. Ignoring such letters is not a good idea - the best course of action is to reach out to the IRS and let them know your situation. If you don’t have the money available to pay, it might be possible to negotiate a payment plan or even a reduction of the total owed.

What you can also expect if you file late is a penalty of 5% of the tax owed for up to five months. Filing more than 60 days after the due date could result in a minimum penalty equal to the lesser of 100% of the tax required to be paid on your return or $435.

If you have filed but then fail to pay your taxes, you can expect a penalty, plus interest. 

To claim prior tax year refunds

Another reason to file prior tax year returns could be to secure a tax refund that you are owed. The average refund for 2019 was more than $2,500, but you will need to have completed a tax return for a given year in order to get it... and not owe the IRS anything either. 

You get a three-year window of opportunity to claim a refund before any money owed to an individual becomes property of the U.S. Treasury. So if you are yet to complete your 2017 return, filing by April 15, 2021 is the final opportunity that you have to receive the refund you might be owed. 

To protect Social Security benefits

Another way in which you could miss out financially by not filing your federal return on time is if you are self-employed. This is because any income you earned through self-employment will not have been reported to the Social Security Administration, potentially meaning you won’t receive the credits you need to qualify for Social Security retirement or disability benefits.

To avoid credit damage and problems securing loans

If you owe money to the IRS, this could be flagged on your credit report in much the same way as any other debt would, and potentially affect your ability to secure personal loans, credit cards, mortgages and so on. In a similar vein, if you are looking to buy or refinance a home, get a business loan or apply for federal aid for higher education, the best mortgage lenders and other credit providers will want sight of copies of filed tax returns to proceed.

Stimulus payments

With the delivery of a third stimulus check set to be based around either your 2019 or 2020 taxes, the only way to make sure you receive the correct relief payment is to make sure the information that the IRS holds for you is up to date. You might even find you’re eligible for a top up to the stimulus payments you’ve already received, via the Recovery Rebate Credit. 

How to file prior year tax returns

Whatever your reason for having previously neglected to file a return - and regardless of your reason for wanting to do so now -  there are a number of ways to file prior year tax returns. Contacting the IRS will usually be your first step, so that you can find out exactly what you need to provide and for which years. If you have several past-due returns to file, you might have to file returns for the current year and past six years, although your particular circumstances and what the IRS decides will ultimately determine how far back you should file.

What you need to file prior tax year returns

To file back taxes, you’ll need to find all the relevant documents that show your income, such as W-2 forms and 1099s. If you can’t find these forms, try asking your employer for a copy or reach out to the IRS for a free tax transcript. You’ll also need the various documents that provide proof of your eligibility for the credits and deductions that you want to claim. 

Once you’ve located the necessary documents, you’ll need to fill out your tax return, starting with Form 1040. As these change each year, always make sure the form you have is for the tax year you’re filing for. 

Filing for yourself

The cheapest way of filing prior year tax returns is to do it yourself. The IRS has most of the prior tax year forms, instructions and information you might need on its website. 

The important thing to note is that the IRS does not support filing prior year returns electronically, so you’ll need to print out the relevant forms and then mail them to the service once completed. The mailing address depends on where you live, and can be found on the IRS website here. 

Making use of tax software will cost you more, but what you’re also paying for is the additional guidance and support you might need to get the job done. Providers such as TurboTax and H&R Block have back editions of software relating to past tax years that you can buy, but while you can generally complete the return using the package, you’ll still be expected to print and mail it to the IRS. 

Using a tax professional

If your tax situation is complicated, or you’d simply prefer to hand everything over to an expert, you could pay for a professional tax preparation service. It will almost certainly cost more than any online software you could buy, but you will save yourself time, and should guarantee that your prior year returns have been dealt with once and for all. 

Paying tax owed on prior year returns

Even if you haven’t got the funds available to pay any back taxes that you may owe, you should still file, and then request an additional 60-120 days to pay. This can be done either through the IRS’ Online Payment Agreement application or by calling the service at 800-829-1040. You won’t be charged for requesting extra time to pay. 

If 120 days still isn’t long enough to pay off your debt in full, you can request an installment agreement from the IRS, under which you’d make monthly payments until your balance is met. If this is out of your reach, you may be eligible for an offer in compromise, where the IRS will consider accepting a lesser amount than what you owe.