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Thread: two questions (bank accounts and credit cards)

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    Featured Member Sveta's Avatar
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    Default two questions (bank accounts and credit cards)

    Question #1. re: credit. I have one credit card, and I always paid the balance in full every month for three years. But I had a string of emergencies earlier this year, so I've been paying the minimum for about 6 months, and I'm now over my limit by about $30 (due to a gym membership that I canceled months ago, but they're still billing me every month b/c they're shady bastards.)

    How much is this going to hurt my credit score?

    And after I pay off the balance...if I just charge some miniscule amount every month (like only charge 20$ of groceries or something on the card) and pay it off every month, will that improve my credit score?

    Question #2: re: bank accounts and the IRS.

    I'm a dual citizen, and I want to open a savings account in another country the next time I go back for a visit. Just because I would feel more secure not putting all my eggs in one basket money-wise. Would this somehow increase my chances of an audit in the U.S.?
    Last edited by Sveta; 08-31-2008 at 07:17 AM.
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    Banned Melonie's Avatar
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    Default Re: two questions (bank accounts and credit cards)

    answer #1 ... it depends on what your credit score was before the minimum payments and over the limit situations began. I'd guess 50 points worth. And yes if you pay off the balance and maintain a zero balance your credit score will slowly improve. It would improve faster if you actually ran a balance that was perhaps 25% of your credit limit and thus were making interest payments.

    answer #2 - it depends on whether or not you would be transferring any cash between your US accounts and your accounts in a foreign country. If such transfers are made, it will DEFINITELY attract the immediate attention of the IRS as well as DHS ( assuming from your name that the foreign account will not be in the UK / Canada / Australia etc. )

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    Featured Member Sveta's Avatar
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    Default Re: two questions (bank accounts and credit cards)

    Quote Originally Posted by Melonie View Post
    answer #1 ... it depends on what your credit score was before the minimum payments and over the limit situations began. I'd guess 50 points worth. And yes if you pay off the balance and maintain a zero balance your credit score will slowly improve.
    *whew*. Awesome. It was in the 700's at the beginning of the year...so if it drops 50 points that still wouldn't be a horrendous score. Good tip about how to improve it faster; thanks.

    answer #2 - it depends on whether or not you would be transferring any cash between your US accounts and your accounts in a foreign country.
    No, I would only be a) depositing money in person when I go there, and b) depositing money that I earn while working there.

    Is having a bank account in the UK/Canada/Australia/(Ireland?) seen as less 'suspicious' to the IRS than having one in a non-English-speaking country?

    Many thanks for the advice.
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    Banned Melonie's Avatar
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    Default Re: two questions (bank accounts and credit cards)

    Is having a bank account in the UK/Canada/Australia/(Ireland?) seen as less 'suspicious' to the IRS than having one in a non-English-speaking country?
    it's not about english speaking ... it's about the likelihood of an islamic terrorist presence in that foreign country potentially using bank accounts to fund terrorist efforts inside the USA. This is the reason that DHS is now watching international bank transfers like a hawk. Since the UK/Canada/Australia do a very thorough job of tracking such things internally, bank transfers with these countries draw far less scrutiny than, say, bank transfers with Russia/Serbia/Romania.

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    Featured Member Sveta's Avatar
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    Default Re: two questions (bank accounts and credit cards)

    ^^ ah OK. Thanks.
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    Default Re: two questions (bank accounts and credit cards)

    Melonie, you'd make a great big sister. You're full of good advice. Sveta, If you were scoring in the 700's, and this is your only issue, you are in fact in good shape. Use of revolving credit will typically hurt you in only two ways: 1)delinquent payments, and 2)high utilization (being anywhere near your limit or over it). It really is a complex formula, but it works pretty well. The dq payments are a bigger deal than the % of credit utilized, but the latter still factors in, and in some cases will get your card closed. Unless your card has a $60,000 limit, you're probably still in the 700's, or at least very high 600's, which will still get you decent pricing (on loans). "Horrendous" is something in the low to mid 500's, and "horrendous" is immensely popular, unfortunately.

    Melonie, stop me if I'm wrong, but I suspect the bank you choose out of the US is never going to alert the US to the fact that you have an account. Do your research on the bank and the country. Switzerland and many Latin American countries will now report and deport folks for financial crimes / tax evasion. (financial aid in the world market is cheap, but it's not entirely free...). If hiding the money is important, than find a country that doesn't income tax their citizens and refuses to respond to the arm of the US treasury. It also helps to choose one where they speak your language(s), and where they have a very stable government with no larger, hostile neighbors in proximity. There are lots of sites that address this. Check them out at the local Starbucks so your peeps in the US don't tie YOUR ISP, and thus your ID to the site you're checking out.

    Legally, you must claim any significant money you take abroad. You will be taxed on it, 'cause the US government wants their piece. If you do fishy things with your US Bank account, including any withdrawal of $10k or more whatsoever, the bank will submit a SAR (Suspicious Activity Report). No, they will not be fooled by your w/d of $9,999 or your multiple w/d's that add up to real money. God only knows what happens to SARS after they leave the bank because there have to be millions of them filed every year. Soon they'll be bar-coding them, I just betcha!

    If you get caught carrying out $20k in (anyone's) currency, however, you'll be eating very bad food for awhile.

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    Default Re: two questions (bank accounts and credit cards)

    ^^^ It's one thing if you have dual citizenship and are able to personally travel to a foreign country 4 times a year for family visits ( with a quick stop at the foreign bank's local branch near your family ) while carrying $9,000 in your purse. It's another thing to try and set up foreign bank accounts and electronically transfer funds into them from within the USA.

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    Default Re: two questions (bank accounts and credit cards)

    2) if that's what you're doing, the American IRS will never know. Even credit score doesn't transfer between countries.


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