2020 Could Be an Unprofitable Year for Rental Properties. Here’s How to Handle the Taxes

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Economic fallout from the COVID-19 crisis and civil unrest could cause many rental real estate properties to run up tax losses in 2020 and maybe beyond. This column covers the most important federal income tax questions and answers for rental property owners. Here goes.

What can I write off?

Nothing new here. You can deduct mortgage interest and real estate taxes on rental properties. You can also write off all standard operating expenses that go along with owning rental property: utilities, insurance, repairs and maintenance, care and maintenance of outdoor areas, and so forth.

What about depreciation write-offs?

For many rental property owners, the tax-saving bonus is the fact that you can depreciate the cost of residential buildings over 27.5 years, even while they are (you hope) increasing in value. You can generally depreciate the cost of commercial buildings over 39 years.

Example: You own a small apartment building that cost $1.5 million not including the land. The annual depreciation deduction is $54,545 ($1.5 million/27.5). The deduction can shelter that much annual positive cashflow from income taxes. So, depreciation write-offs are nice tax-savers, especially if you own an expensive property or several properties.

Variation: As stated earlier, commercial buildings must be depreciated over a much-longer 39-year period. Even so, the annual depreciation write-off for a $1.5 million commercial building is $38,462. The deduction can shelter that much annual cash flow from income taxes.

Can I claim 100% first-year bonus depreciation?

Yes, for qualified improvement property (QIP) expenditures on a nonresidential building. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) included a retroactive correction to the statutory language of the Tax Cuts and Jobs Act (TCJA). The correction allows much faster depreciation for commercial real estate qualified improvement property (QIP) that’s placed in service in 2018-2022. QIP is defined as an improvement to an interior portion of a nonresidential building that’s placed in service after the building was placed in service. However, QIP doesn’t include any expenditures attributable to: (1) enlarging the building, (2) any elevator or escalator, or (3) the internal structural framework of the building. Thanks to the CARES Act correction, you can write off the entire cost of QIP in Year 1, because it qualifies for 100% first-year bonus depreciation.

Alternatively, you can choose to depreciate QIP over 15 years using the straight-line method. That alternative might make sense if you expect higher tax rates in future years. Discuss your QIP depreciation options with your tax pro.

What else do I need to know about depreciation write-offs?

You ask such good questions. There’s more. The TCJA increased the maximum Section 179 first-year depreciation deduction for qualifying real property expenditures to $1 million, with annual inflation adjustments. The inflation-adjusted maximum for tax years beginning in 2020 is $1.04 million. The Section 179 deduction privilege potentially allows you to deduct the entire cost of qualifying real property expenditures in Year 1. I say potentially, because Section 179 deductions are subject to several limitations. Ask your tax pro for details.

The TCJA also expanded the definition of qualifying property to include expenditures for nonresidential building roofs, HVAC equipment, fire protection and alarm systems, and security systems.

Finally, the TCJA further expanded the definition of qualifying property to include depreciable tangible personal property used predominantly to furnish lodging. Examples of such property include beds, other furniture, and appliances used in the living quarters of an apartment house.

Can I claim the qualified business income (QBI) deduction base on my net rental income?

Maybe. For 2018-2025, the TCJA established a new personal deduction based on qualified business income (QBI) passed through to your personal Form 1040 from a pass-through business entity (meaning a sole proprietorship, LLC treated as a sole proprietorship for tax purposes, partnership, LLC treated as a partnership for tax purposes, or S corporation). The deduction can be up to 20% of QBI, subject to restrictions that kick in at higher income levels. For a while, it was unclear if you could claim QBI deductions based on net rental income passed through to you from one of the aforementioned pass-through entities. The IRS eventually issued taxpayer-friendly guidance that allows QBI deductions in most such cases, but you must follow complicated rules to collect the tax-saving benefit. As your tax pro for details.

What about the passive loss rules?

Ugh. If your rental property throws off tax losses (most properties do, at least during the early years and during years when the economy is suffering — like now), things can get complicated. The so-called passive activity loss (PAL) rules may come into play. Losses from rental properties will usually be classified as passive losses.

In general, the PAL rules only allow you to currently deduct passive losses to the extent you have current passive income from other sources, like positive income from other rental properties or gains from selling them. Passive losses in excess of passive income are suspended until you either have enough passive income or you sell the property that produced the losses. Bottom line: the PAL rules can postpone any tax-saving benefit from rental property losses, sometimes for years. Fortunately, there are several exceptions to the PAL rules that can allow you to deduct rental property losses sooner rather than later. Your tax pro can explain the exceptions and help you plan to become eligible, if possible.

Is that the end of the bad news?

Not exactly. Say you manage to successfully clear the hurdles imposed by the PAL rules for your rental property losses. So far, so good. But the TCJA established another hurdle that you must also clear to currently deduct those losses. For tax years beginning in 2018-2025, you cannot deduct an excess business loss in the current year. An excess business loss is one that exceeds $250,000 or $500,000 for a married joint-filing couple. Any excess business loss is carried over to the following tax year and can be deducted under the rules for net operating loss (NOL) carry-forwards. This loss disallowance rule applies after applying the PAL rules. So, if the PAL rules disallow your rental losses, this rule is a nonfactor.

COVID-19 Relief: Thankfully, the CARES Act suspends the excess business loss disallowance rule for losses that arise in tax years beginning in 2018-2020. That’s good news.

What’s the deal with net operation losses (NOLs)?

Say you manage to successfully clear both of the preceding hurdles for your rental property losses. Now we are talking, because you can generally use those losses currently to offset taxable income from other sources. If losses for the year exceed income from other sources, you may have a net operating loss (NOL) for the year.

COVID-19 Relief: The CARES Act allows a five-year carryback privilege for an NOL that arises in a tax year beginning in 2018-2020. So, you can carry an NOL from one of those years back to an earlier year, deduct it, and recover some or all of the federal income tax paid for the carryback year. Because federal income tax rates were generally higher in years before the TCJA took effect, NOLs carried back to those years can be especially beneficial. The TCJA kicked in starting with tax years beginning in 2018.

What if I have positive taxable income?

Eventually your rental property should start throwing off positive taxable income instead of losses, because escalating rents will surpass your deductible expenses. Of course, you must pay income taxes on those profits. But if you piled up suspended passive losses in earlier years, you can now use them to offset your passive profits.

Another nice thing: positive taxable income from rental real estate is not hit with the dreaded self-employment (SE) tax, which applies to most other unincorporated profit-making ventures. The SE tax rate can be up to 15.3%. Something to avoid when possible.

One bad thing: positive passive income from rental real estate owned by a higher-income individual can get socked with the 3.8% net investment income tax (NIIT), and gains from selling properties can also get hit with the NIIT. Ask your tax pro for details.

The bottom line

There you have it: most of what you need to know about the federal income tax issues that can come into play for rental property owners. The economic fallout from the COVID-19 crisis and recent civil unrest increase the odds that rental properties will suffer losses in 2020, but tax relief provisions may soften the blow.

The post 2020 Could Be an Unprofitable Year for Rental Properties. Here’s How to Handle the Taxes appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

2020 Financial Crisis Auto Loan Relief

Car manufacturers have been feeling the strain during the financial crisis. There are fewer cars on the road, workers in the factories, and consumers willing to spend, and as a result, the automobile industry has been devastated.

But manufacturers and showrooms are fighting back, finding ways to encourage consumers to buy and to make life easier for the ones that already have. In this guide, we’ll look at the ways that auto lenders are helping consumers hit by the crisis and the ways that manufacturers are encouraging more drivers to purchase.

Financial Crisis Auto Relief: Manufacturers

Automobile manufacturers saw their profits free-fall in March 2020 and that followed into April, with suggestions that the chaos will progress as the year (and the pandemic that has gripped it so fiercely) continues. They are struggling and their customers are struggling as well.

Over 700,000 Americans lost their job in March and unemployment is set to rise to levels that haven’t been seen for years. To make matters work, the country’s 9.5 million+ self-employed workers have seen their incomes half. 

As a result, many are struggling with their debts and finding it harder to meet auto loan payments. To lend a helping hand, many of the world’s biggest manufacturers have established auto loan relief programs:

Ford

Ford announced its response to the crisis towards the end of March. Known as the Built to Lend a Hand program, it offers up to 6 months payments on a brand-new Ford and applies to all models from 2019 and 2020.

As soon as consumers sign up, they will be given 3 months of payments from Ford, while an additional 3 months can be deferred as per the customer’s request. The customer can choose to defer these payments as and when they want, but they must get their auto loan through the Ford Credit program to apply.

Hyundai

South Korean manufacturer, Hyundai, was one of the first to offer an auto loan relief program. South Korea was one of the hardest-hit countries in the early stages of the virus and this led to the major automobile brand offering a relief program in the middle of March.

Known as the Assurance Job Loss Protection, this program first appeared following the 2008 recession and has been revived for the recent pandemic. 

As part of this auto loan relief program, consumers who bought or borrowed a car after March 14 can have up to 6 payments made by Hyundai. They can also request payment deferment that lasts for up to 90 days.

The Assurance Job Loss Protection program is set to run until April 30 and applies to everyone who purchases a Hyundai through eligible finance programs. It also extends to Genesis, the luxury division of Hyundai Motors that is responsible for new vehicles such as the 2020 Genesis G90.

If the pandemic continues to grow in scale and severity, the program may be prolonged, although only time will tell.

Nissan

Nissan is following in the footsteps of many major creditors and lenders by working with customers on a case by case basis. If you’re feeling the strain of the crisis, whether because you’ve lost some or all of your income or your expenses have increased, you can contact them and request some relief.

For borrowers struggling to meet monthly payments, Nissan offers deferred payments, but only if hardship can be proved. You likely won’t be offered anything just because you ask for it and must show that your financial situation is worse now than it was before the financial crisis.

The same applies to all Infiniti car owners, which is Nissan’s luxury brand.

Kia

Kia announced that all 0% APR borrowers could defer payments for up to four months. Borrowers who don’t qualify for this can still request deferment of up to 30 days on 3 different occasions.

However, as with Nissan and many other providers, borrowers need to prove that they are experiencing hardship to be offered this auto loan relief.

General Motors

GM has seen some pretty hefty losses during the financial crisis, and this is despite the fact that it began the year on a high note, making noticeable gains that were all but wiped out in the first couple weeks of March.

GM is offering a few different options to keep consumers happy and to ensure cars are still driven out of the showroom. If you already have a finance program with General Motors, and you’re experiencing hardship, you can contact GM directly, tell them what you’re going through, and get assistance.

The GM OnStar program has also been activated for all current owners. This program offers 24/7 emergency assistance and can help you get to a hospital in your time of need.

If you need a new car, you can get 0% APR for up to 84 months on most GM manufactured vehicles.

Fiat Chrysler

Fiat Chrysler is another brand that began 2020 with a bang and then quickly suffered a substantial slump. To counteract this, it has improved its online offerings, allowing all consumers to purchase a brand-new vehicle online and to benefit from improved financing offers when they do.

In addition, Fiat Chrysler is assisting current owners by making it easy for them to pay their bills.

If you have a car made by this leading manufacturer and you’re struggling to make payments, contact them directly, tell them about your financial hardship, and they may offer to help you with deferred payments and other solutions.

Financial Crisis Auto Relief: Alternative Options

Contrary to what you might think, lenders are not desperate to get their hands on your collateral. The best outcome for them is that you meet your payments and they get every penny of the vehicle’s value along with the interest.

If you default and they are forced to repossess, they need to pay for the repossession, deal with the extra paperwork and hassle, and eventually sell the car for much less than it is worth. They can still chase you for what you owe, but they know they probably won’t get it, making repossession something that lenders are keen to avoid.

When you’re struggling to make your payments, be honest with them, lay it all on the line, and find a compromise. They will probably be a lot more forgiving than you expect, especially during the crisis, when everyone is more understanding and willing to help.

Unfortunately, you don’t have many other debt relief options when it comes to auto loans, as it doesn’t make sense to do a balance transfer and debt settlement simply doesn’t work here. But if you contact your lender, they’ll help you find a solution.

You can think about returning the vehicle, as well. When you lose your job and your income, and you no longer need to drive several miles to and from work every day, what’s the point of owning a car that costs you tens of thousands of dollars and leaves you with a substantial debt?

2020 Financial Crisis Auto Loan Relief is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Homie & Girl Scouts Partner to Build Cookie Castle

As with many things in 2020, selling homes and cookies is being done differently; that’s why we’ve teamed up with the Girl Scouts-Cactus Pine Council in Arizona. In an effort to foster creativity, engineering, and entrepreneurial skills amongst the Girl Scouts we’ve donated $15,000 to the foundation.

Similar to Homie, Girl Scouts encourages innovation and finding new ways of doing things. When Girl Scouts were forced to sell cookies indoors as a result of safety precautions due to the Coronavirus pandemic, we wanted to create something eye-catching and fun. The result – a cookie castle.

What is a Cookie Castle?

One local Girl Scout, Mija and her father are building a 9-foot by 9-foot by 13-foot tall castle mostly out of Girl Scout cookie boxes. This will be the focal point to the Cactus Pine Council’s cookie selling space located at The Shops at Norterra in Phoenix beginning on February 7th.

Girl Scout Mija with her father in front of the cookie castle

Why Partner?

“At Homie, we applaud innovation and embrace making smart, creative changes which is why we wanted to support and encourage the Girl Scouts-Cactus Pine Council’s cookie selling efforts this year,” said Joshua Miller, General Manager at Homie Arizona. “When we learned they were forced to shift gears we wanted to support the fundraising efforts and life skills by aiding in the building of the cookie castle.”

The annual cookies sale is a major fundraiser for Girl Scouts in Arizona, supporting opportunities for girls to learn, grow, and enjoy new experiences. The Cactus Pine Council’s goal is to sell 2.1 million packages of cookies this year.

How Can I Help?

1. Visit the cookie castle – The public can purchase cookies and view the cookie castle every Sunday in February, beginning on February 7th at The Shops at Norterra.

2. Purchase Girl Scout Cookies – Not located in Phoenix? Find cookies by visiting gscookiefinder.com.

Homie is committed to serving and giving back to our local communities. You can also support the Girl Scouts and other meaningful foundations by buying or selling with Homie.

The post Homie & Girl Scouts Partner to Build Cookie Castle appeared first on Homie Blog.

Source: homie.com

UI Extension: How to Get 11 More Weeks of Jobless Benefits

Note: This article has been updated with new information from the Continued Assistance Act (the second stimulus package).

Most states offer Unemployment Insurance for 26 weeks. If your benefits are about to expire, and you’re still out of work, a low-grade panic may be setting in.

Here are two important things you need to know: One, unemployment extensions are available. But, two, they’re not automatic.

In March, the $2.2 trillion CARES Act authorized federal aid to supplement state-level Unemployment Insurance programs, a provision dubbed Pandemic Emergency Unemployment Compensation or PEUC. The second stimulus package passed in December revived PEUC, extending UI benefits for 11 more weeks.

Michele Evermore, senior researcher and policy analyst at the National Employment Law Project, told The Penny Hoarder that the PEUC extension will become “incredibly crucial” as state benefits expire.

Data from the Department of Labor proves that. More than 4 million Americans have exhausted their state UI benefits and are relying on the federal extension.

How Unemployment Insurance Extensions Work

As an Unemployment Insurance recipient, you are likely eligible for PEUC, the new extension program from the federal government.

The catch: You can only apply for this extension once you have run out of your state’s unemployment benefits. You can’t pre-register. The Department of Labor directed states to alert you by email or letter if you are potentially eligible for the extension, but made it clear to states to not automatically enroll people.

By design, this may cause an interruption in weekly payments.

Another source of uncertainty is the number of weeks PEUC will extend your unemployment benefits in total. The first stimulus package authorized 13 additional weeks of benefits. The second package authorized 11 more. But it’s more complicated than adding those two figures together and getting 24 extra weeks.

The unemployment provisions laid out in the first stimulus package expired in December 2020. So the 13 extra weeks provided by the CARES Act are no longer available to new applicants.

But even if you didn’t get that first extension, you could still get the 11 additional weeks approved in the second stimulus bill.

Pro Tip

The PEUC application is based on your state-level unemployment claims. While you must opt in to receive the additional weeks of benefits, you won’t have to completely reapply.

Under PEUC, your weekly benefits will be the same as your state benefits, the check will just be coming from the federal government.

But Wait. There’s More.

If you are unable to find work after exhausting your state’s program and all additional weeks of PEUC, you may be eligible for a separate extension from your state.

In times of high unemployment rates, 49 states (all except South Dakota) have an Extended Benefits or EB system that adds up to 20 weeks of benefits, according to data compiled by the Center on Budget and Policy Priorities. Provided that local unemployment rates are still high when you exhaust PEUC, you may qualify for more benefits.

“There’s an order of operations here,” Evermore said.

Based on guidance from the Labor department, the order of unemployment programs for typical jobless workers goes like this:

  1. State UI programs (which vary from 12 to 30 weeks)
  2. Federal Emergency Unemployment Compensation (as many as 24 weeks)
  3. State Extended Benefits or EB (six to 20 weeks)
  4. The final failsafe if all other programs are exhausted: Pandemic Unemployment Assistance.

Here’s our 50-state guide to filing for Pandemic Unemployment Assistance. (We include an interactive map with specific state-by-state instructions.)

Pandemic Unemployment Assistance is a federal program that’s available for a maximum of 50 weeks, including the weeks of all previous programs you may have been on.

For example, Florida has the shortest duration of unemployment benefits, at 12 weeks. The state’s Extended Benefits program is also one of the shortest, at six weeks. The order of operations for all possible extensions in Florida would look like this: 12 weeks of UI, 24 (max) weeks of PEUC, six weeks of EB. The total so far is 42 weeks, meaning Florida residents can potentially use Pandemic Unemployment Assistance for 8 weeks to reach the maximum of 50 weeks of aid.

New York residents who exhaust their state’s program, in contrast, would not be eligible for PUA because the total length of their state benefits plus all available extensions exceeds 50 weeks. By quite a bit, too. Including all sources of assistance, New Yorkers are eligible for up to 70 weeks of unemployment benefits.

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“Taken together, the expanded benefits have had a massive effect on the economy,” Evermore said. “Initial unemployment claims are still coming in at unprecedented levels — but this could have been a lot worse without all these federal benefits.”

For jobless applicants, though, taking all this in can be overwhelming. But benefits are there if you can trudge through the paperwork and arcane websites.

“Understanding the difference with all these programs and acronyms is going to be confusing,” Evermore said. “Just follow the instructions from your state agency. The agency is required to give you information on how to apply [for extensions].”

Whatever you do, don’t lose your password to your online unemployment profile.

“The password reset process, in many states, is really difficult,” Evermore said. “You have to call and talk to a password reset person, and then that person will mail you — in the mail — a new password.”

Adam Hardy is a staff writer at The Penny Hoarder. He covers the gig economy, entrepreneurship and unique ways to make money. Read his ​latest articles here, or say hi on Twitter @hardyjournalism.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

How to Prepare for the End of Your Unemployment Benefits

Before the coronavirus reached the U.S., unemployment was low and few could have anticipated a global pandemic. However, as the pandemic and ensuing recession took hold, a record-breaking number of people filed for unemployment benefits to stay financially afloat.

“COVID-19 led to an incredible number of American workers being without work,” says Julia Simon-Mishel, an unemployment compensation attorney. “And it’s caused a huge need for individuals to file for unemployment insurance.”

Unemployment insurance, or unemployment benefits, can offer an essential lifeline. But if you’ve never accessed these benefits before, you may have questions about how they work. You might also be asking: What do I do when my unemployment benefits run out and I’m still unemployed?

This article1 offers tips about what you need to know about filing an unemployment claim. It also addresses the following questions:

  • How do you prepare for the end of unemployment benefits?
  • Can your unemployment benefits be extended?
  • What can you do when unemployment runs out?
  • Can you refile for unemployment after it runs out?

A record number of people have filed for unemployment, and many are wondering what to do when unemployment runs out.

If you’re just getting ready to file or need a refresher on the basics of unemployment benefits, read on to have your questions answered.

If you’re already collecting benefits and want to know what happens once you reach the end of the benefit period, skip ahead to “Steps to take before your unemployment benefits run out.”

Common questions about unemployment benefits

Experiencing a job loss is challenging no matter what. Keep in mind that you’re not alone, and remember that unemployment benefits were created to help you.

As you consider how to prepare for the end of unemployment benefits, remember that you're not alone.

While they’re designed to provide financial relief, unemployment benefits are not always easy to navigate. Here’s what you need to know to understand how unemployment benefits work:

What are unemployment benefits?

Unemployment insurance provides people who have lost their job with temporary income while they search for and land another job. The amount provided and time period the benefits last may vary by state. Generally, most states offer up to half of a person’s previous wages in unemployment benefits for 26 weeks or until you land another full-time job, whichever comes first. Requirements and eligibility may vary, so be sure to check your state’s unemployment agency for guidance.

How do you apply for unemployment benefits?

Depending on where you live, claims may be filed in person, by phone or online. Check your state government’s website for details.

Who can file an unemployment claim?

This also may vary from state to state, but eligibility typically requires that you lost your job or were furloughed through no fault of your own, in addition to meeting work and wage requirements. During the coronavirus pandemic, the government loosened restrictions, extending unemployment benefits to gig workers and the self-employed.

When should you apply for unemployment benefits?

Short answer: As soon as possible after you lose your job. “If you are someone who has had steady W2 work, it’s important that you file for unemployment the moment you lose work,” Simon-Mishel says. The longer you wait to file, the longer you’re likely to wait to get paid.

When do you receive unemployment benefits?

Generally, if you are eligible, you can expect to receive your first benefit check two to three weeks after you file your claim. Of course, this may differ based on your state or if there’s a surge of people filing claims.

Can unemployment benefits be extended? Check your state’s unemployment insurance program page for updates.

2020 enhancements to unemployment benefits for freelance and contract workers

In early 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. In addition to other benefits, the CARES Act created a new program called Pandemic Unemployment Assistance. This program provides unemployment benefits to independent contractors and other workers who were typically ineligible. That means that if you don’t have steady W2 income—for instance, freelance and contract workers, those who file 1099s, farmers and the self-employed—you still may qualify for unemployment benefits.

“That program is a retroactive payout,” Simon-Mishel says. “If you’re just finding out about that program several months after losing your job, you should be able to file and get benefits going back to when you lost work.”

Because legislation affecting unemployment benefits continues to evolve, it’s important that you keep an eye out for any additional stimulus programs that can extend unemployment benefits. Be sure to regularly check your state’s unemployment insurance program page for updates.

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“It’s really important to keep on top of all the information out there right now and be aware of what benefits are available to you.”

– Julia Simon-Mishel, unemployment compensation attorney

Steps to take before your unemployment benefits run out

In a perfect world, your job leads would become offers long before you reached the end of your unemployment benefits. But in reality, that’s not always the case.

If you’re still unemployed but haven’t yet exhausted your benefits and extensions, you may want to prepare for the end of your unemployment benefits as early as possible so you don’t become financially overwhelmed. Here are four tips to help you get through this time:

Talk to service providers

Reaching out to your utility service providers like your gas, electric or water company is one of the first steps John Schmoll, creator of personal finance blog Frugal Rules, suggests taking if you’re preparing for the end of unemployment benefits.

“A lot of times, either out of shame or just not knowing, people don’t contact service providers and let them know what their situation is,” Schmoll says. “[Contact them to] see what programs they have in place to help you reduce your spending, and basically save as much of that as possible to help stretch your budget even further.”

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Save what you can

To help prepare for the end of your unemployment benefits, a few months before your benefits end, Schmoll suggests cutting back spending as much as possible, focusing only on necessities.

“If you can try and save something out of the benefits that you’re receiving while you’re receiving them—it doesn’t matter if it’s $10 or $20—that’s going to help provide some cushion,” Schmoll says. Keep those funds in a separate account if you can, so you’re not tempted to spend them. That way you’re more prepared in case of an emergency.

If you hunkered down during your period of unemployment and were able to save, try to resist the urge to splurge on things that aren’t necessary.

“There might be temptation to overspend, but curtail that and focus on true necessities,” Schmoll says. “That way when [or if] you receive an extension on your benefits, you now have that extra money saved.”

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Saving money can be a good way to prepare for the end of your unemployment benefits.

Saving money can be a good way to prepare for the end of your unemployment benefits.

Seek additional financial aid

If you find that your savings and benefits aren’t covering your expenses, and you’re reaching a point where you no longer qualify for benefits, look into other new benefit programs or features designed to help during times of crisis.

For example, there are programs across the country to assist people with rent or mortgages, Simon-Mishel says. Those programs are generally designed to keep those facing financial hardship from losing their home or apartment. You may need to show that you are within the programs’ income limits to qualify, or demonstrate that your rent is more than 30 percent of your income. These programs vary widely at the state and even city level, so check your local government website to see what might be available to you.

As you prepare for the end of your unemployment benefits, explore which government benefits or government agency may be best suited for your needs.

Keep up with the news

During economic downturns, government programs and funds often change to keep up with evolving demand.

“It’s really important to keep on top of all the information out there right now and be aware of what benefits are available to you,” says Simon-Mishel. “You should closely pay attention to the social media of your state unemployment agency and local news about other extension programs that might be added and that you might be eligible for.”

Pay attention to social media and local news as you prepare for the end of your unemployment benefits.

Options for extending your unemployment benefits

If you’re currently receiving benefits, but they’ll be ending soon, you’re likely wondering what to do when your unemployment runs out and asking if your unemployment benefits can be extended. Start by confirming when you first filed your claim because that will determine your benefit end date.

If you’re wondering, “Can you refile for unemployment after it runs out?” the answer is yes, but you’ll have to wait until your current “benefit year” expires. Note that a benefit year is 12 months from when you file a claim. If you filed at the beginning of June, for example, you generally can’t file again until the beginning of the following June.

You may get 26 weeks of unemployment benefits, depending on your state’s rules at the time. Most states extended the payout period to 39 weeks in the wake of the COVID-19 crisis. Check your state’s website for the particulars on what to do when your unemployment runs out.

If your claim is still active but you’ll be in need of additional financial relief after your unemployment benefits run out, here are your options:

File for an unemployment extension

During extraordinary economic times, such as the coronavirus pandemic, the federal government may use legislation like the CARES Act to offer people more benefits for a longer period of time, helping many people concerned about whether unemployment benefits can be extended.

Can you refile for unemployment after it runs out? It can vary by state, so reach out to your unemployment office.

For example, in 2020, for most workers who exhaust, or receive all of, their unemployment benefits, a 13-week extension should automatically kick in, Simon-Mishel says. This would bring you up to 39 weeks total. However, if more than a year has passed since you originally filed and you need the extension, you will likely need to file a short application provided by the government. Details vary by state.

As you’re determining what to do when your unemployment runs out, reach out to your unemployment office. It’s important to do this before your benefits expire so you can avoid a missed payment. You can also confirm you’re eligible and that you can refile for unemployment after it runs out.

Ask about the Extended Benefits program in your state

Can unemployment benefits be extended beyond that? In periods of high unemployment, you may qualify for a second extension, depending on your state.

“After those [first] 13 weeks, many states have added a new program called Extended Benefits that can provide another 13 to 20 weeks of unemployment when a state is experiencing high unemployment,” Simon-Mishel adds. This means you may be able to receive a total of up to 59 weeks of unemployment benefits, including extensions. The total number of weeks of unemployment you may receive varies based on your state and the economic climate.

It’s hard enough keeping up with everything as you prepare for the end of unemployment benefits, so don’t worry if you don’t have your state’s benefits program memorized. Visit your state’s unemployment insurance program page to learn more about what benefits are available to you.

For anyone considering what to do when unemployment runs out, it's important to take things one day at a time.

Beyond unemployment benefits

While life and your finances may seem rocky now, know that you’re not alone. Remember that there are resources available to help support you, and try to take things one day at a time, Schmoll says.

“Realize that at some point your current situation will improve.”

If you find that your benefits aren’t covering all of your expenses, now may be the time to dip into your cash reserve. Explore these tips to determine when it’s time to use your emergency fund.

1 This article is not legal advice and should not be construed as such. Eligibility for unemployment benefits may be impacted by variations in state programs, changes in programs, and your circumstances. If you have questions, you should consider consulting with your legal counsel, at your expense, or seek free assistance from your local legal aid organization.

Articles may contain information from third-parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third-party or information.

The post How to Prepare for the End of Your Unemployment Benefits appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com

Bundle Up! Winter’s Home-Buying Game Has Changed. Here’s How To Win

How to buy a house this winterViktoriia Hnatiuk / Getty Images

Savvy home buyers know that winter is typically a good time to embark on a house hunt, since much of their competition stays holed up at home until spring. But this winter, buyers might notice that despite the cold and the holidays, they’ve got company.

Lots of it, in fact.

“Normally winter is a good time for buyers,” says realtor.com® chief economist Danielle Hale. However, since the coronavirus kept buyers on lockdown for much of spring, many are making up for lost time by home shopping hard right now.

“This year’s unusual seasonal pattern means that buyers aren’t getting the usual break from the market frenzy that they typically do in the cooler weather,” Hale explains.

As a result, this winter is shaping up to be a seller’s market, with low real estate inventory, high prices, and bidding wars that could give buyers a major run for their money.

This doesn’t mean you should throw in the towel—just that you’ll have to hone your house hunt in new ways to suit the times. Here are some tactics that will keep you ahead of the pack so you’ll be sitting in a new home by the new year.

Secure your financing as soon as possible

Getting pre-approved for a mortgage and securing financing are an essential first step when buying a home. It gives you a clear picture of how much house you can afford, and lets you make an offer as soon as you find your dream home.

Matt van Winkle, a real estate broker and owner at Re/Max Northwest Realtors in Seattle, says this process is more important now than ever.

“Getting pre-approved for a loan is obviously important, but is there anything else they can do to put themselves in a good position?” he says. “Buyers need to be ready to buy a house before they start looking.”

Too often, buyers don’t line up their financing until they find a home they want to buy, van Winkle says. In the current competitive market, waiting to get pre-approval means you could lose out on purchasing a home you love.

“That creates a mad dash and stress to get everything lined up under pressure,” he says. “Get all your financing secured and ready before you look, that way when you find the right home you’re 100% ready.”

Starting early could also help you lock in an ultralow interest rate, which could affect your monthly mortgage payment and mean you could afford a more expensive home. As of Oct. 22, Freddie Mac listed rates at 2.8% for a 30-year fixed-rate loan.

Know what you want before you house hunt

COVID-19 has changed how we live and work. We’re spending much more time at home, and people are looking for different features in their living spaces.

Make a list of your must-haves before you start house shopping—and share your needs with your real estate agent.

Simon Isaacs, broker and owner of Simon Isaacs Real Estate in Palm Beach, FL, says it helps cut down on the number of homes you’ll have to view before finding the right one.

“I would suggest buyers not look at 25 homes,” he says. “If the agent is showing them that many houses, the agent doesn’t know what they want.”

In such a competitive landscape, knowing exactly what you want enables you to act fast when you want to make an offer.

Tour homes virtually first

More real estate agents are embracing virtual tours and remote showings to ease coronavirus safety concerns. In some cases, they’re even limiting in-person showings to the most serious buyers—those with financing already secured, for example.

“Real estate agents in our local market are adjusting to the client’s needs by continuing to provide in-person showings with precautions and also assisting buyers virtually with their home purchases,” says Matt Curtis, owner of Matt Curtis Real Estate in Huntsville, AL.

Virtual home tours, using Zoom or FaceTime, let you view the home from anywhere, and depending on the setup, you might be able to ask questions in real time. So you can narrow down the homes you’re most interested in and physically visit only the ones that best meet your needs.

Don’t dawdle if you want to make an offer

In September, there were nearly 40% fewer homes on the market than during the same month last year, according to a realtor.com report. At the same time, buyer demand has increased, creating an incredibly competitive marketplace. Homes were on the market for an average of 54 days in September, 12 fewer days than last year.

Tracy Jones, a real estate agent with Re/Max Platinum Realty in Sarasota, FL, says the buyers she’s worked with lately have had just a few homes to consider. And, with all the other buyers in a location also looking at those same houses, you’ll need to act fast if you’re interested.

The challenge, she says, is potential buyers have little time to mull things over, and they are pitted against one another.

Isaacs is seeing a similar situation. Wait too long to submit an offer, and another buyer is likely to swoop in with an offer of their own.

“I would say don’t deliberate on buying,” he says. “I’ve had too many clients who were [saying], ‘Should we, shouldn’t we.’ I would say if it’s something that you want to do, do it.”

Make your offer stand out

Since inventory is so low, sellers are getting multiple offers on their homes these days. To make sure yours gets accepted, you’ll need to make it stand out.

Cash offers and inspection waivers are some ways to make your offer more appealing, Curtis says.

A cash offer, if you can afford it, is attractive to sellers because it eliminates dealing with a mortgage lender and often speeds up closings. An inspection waiver comes with lots of risks, since you’re essentially agreeing to purchase a home as is, but the waiver removes any repair negotiations and helps you close faster.

For competitive markets, where you know you’ll be competing directly with many buyers, Jones suggests talking to your agent about escalation clauses. This is a contract addendum where you agree to pay more than other offers (up to a maximum you set).

Bottom line: “Find a strategy to help make your offer stand out amongst the 10, 20, or more offers that may come in on your dream home,” Curtis says.

The post Bundle Up! Winter’s Home-Buying Game Has Changed. Here’s How To Win appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

Things To Do While You’re Stuck In Your Apartment

Creating An Inspiring Home Office Space

Guest Post

Things To Do While Stuck In Your Apartment During the Coronavirus Pandemic

By now, almost everyone in the country is under some kind of shelter-in-place or stay-at-home orders from government agencies due to the coronavirus pandemic. Authorities stress that this is the main way to try to flatten the curve of new infections.

OK, so what can you do while cooped up in your apartment. The options aren’t quite unlimited, but they are numerous. Take advantage of the space you have and undertake any activity that will be good for your mental or physical well-being. Here’s a look at some of the most popular:

1. Do a jigsaw puzzle

This has become quite popular around the country, with people finishing a jigsaw puzzle and then posting a picture of it on social media. The more pieces, the better, say, 1,000 or more. How long you’ll be able to do this to remain occupied depends on how many puzzles you have on hand, or how many times you’re willing to do the same puzzle over again.

If you don’t have jigsaw puzzles, maybe you have a Rubik’s Cube or a book of crossword puzzles. You can also find crossword puzzles online and in your daily newspaper, if you still subscribe.

2. Exercise!

If you have a set of weights in your apartment, use them. Or maybe you’re a packrat and still have exercise routines on VHS tapes or DVDs. If not, there are plenty of routines you can find for free online. 

If you can leave your apartment, go for a walk or a jog, as long as you observe the social distancing rules that are now the new normal. If you don’t want to go outside, walk up and down a stairwell or walk up and down your hallway. Again, give others their personal space.

Short of that, you can go old-school and do crunches, sit-ups and push-ups on your floor. You can also do isometric exercises using a rolled-up bath towel. For a refresher on the techniques, check out these workouts you can do in your apartment and then get to work. 

Whatever you chose, mix it up and keep it fresh as you stay in shape. 

3. Binge-watch

OK, the first two suggestions will put your mind and body to work. At some point you’ll feel like being a couch potato, so why not catch up on a series you’ve been meaning to watch on Netflix, Disney Plus or one of the many streaming services available? You’ve never had a better excuse than now. 

“Tiger King: Murder, Mayhem and Madness” has become all the rage on Netflix. It was released in mid-March and has given people something to do in the age of coronavirus. It is a true-crime documentary television series about the life of former zoo operator Joseph Maldonado-Passage.

If that’s not your thing, there are favorites such as “Narcos: Mexico” and “Stranger Things” on Netflix. If you’ve already seen them, what’s the harm in starting over? On Disney Plus you can watch “The Mandalorian,” “Star Wars: The Clone Wars” and “The Simpsons.”

4. Spring cleaning

It’s spring, and you have a lot of unexpected time on your hands. Now’s a great time to get in some spring cleaning of your apartment. Cut through the clutter and organize your closet and dresser. Most importantly, regularly clean and disinfect important areas such as kitchen surfaces and appliances that are used often. You should also keep your bathroom clean. 

5. Other stuff

There are plenty of other things you can be doing, such as catching up on your reading, playing a musical instrument, writing emails to friends and family and getting plenty of rest.

Read Things To Do While You’re Stuck In Your Apartment on Apartminty.

Source: blog.apartminty.com

How to get the Southwest Companion Pass

#If you’re itching to voyage around the country and to bring a partner along on your adventures, the Southwest Companion Pass is an incredible deal. Believe it or not, with the Companion Pass, you can bring a friend or family member with you for free on every Southwest flight for up to two years.

You may have heard the news: On Jan. 1, 2020, Southwest officially boosted the points requirement for the Companion Pass to 125,000 points. This bump made the Companion Pass harder to earn for many less frequent flyers, though not impossible

With travel interruptions caused by the coronavirus pandemic, earning the Companion Pass for 2021 might seem completely out of reach. Luckily, Southwest is offering relief to those whose canceled plans throttled their hopes of achieving this coveted perk. Southwest has now twice extended statuses for Southwest Companion Pass members. Members who received an extension of their earned Companion Pass benefits through June 30, 2021, will have their benefits extended for another six months through Dec. 31, 2021. Additionally, Rapid Rewards members with an account opened by Dec. 31, 2020, are getting a complimentary boost of 25,000 Companion Pass qualifying points and 25 flight credits toward Companion Pass status. This shortcut, when combined with alternative ways to earn Companion Pass qualifying-points, means the benefit is still achievable in the current environment.

What is the Southwest Companion Pass?

The Southwest Companion Pass is a special benefit for elite members of Southwest’s Rapid Rewards programs. Once you earn 125,000 Rapid Rewards points or 100 qualifying flights in a year, you can designate a companion to bring with you for free (except for taxes and fees) on any Southwest flight that you purchase – with either cash or points. The earlier in the year that you earn the Companion Pass, the better because it’s good through the remainder of the year and the year after that.

The threshold for earning the Companion Pass is steep – amounting to thousands of dollars per month in airfare or multiple flights per week. However, you don’t need to be a rabid Southwest flyer to earn the pass. In the following guide, we’ll delve into the details of the Southwest Companion Pass and shortcuts to earning it.

The best card for Southwest flyers

Southwest Rapid Rewards® Priority Credit Card

Southwest Rapid Rewards Priority card

Why should you get it?

The Southwest Rapid Rewards Priority card is by far the best value for a frequent Southwest flyer, thanks to its $75 travel credit and 7,500-point annual bonus. Plus, the sign-up bonus of up to 80,000 points can help you toward the Southwest Companion pass.

Learn more

More things to know:

  • Earn 50,000 points after spending $2,000 in the first 3 months, plus earn an additional 30,000 points after you spend $10,000 in the first 9 months
  • 7,500 bonus points each year after your card anniversary
  • $75 annual Southwest travel credit
  • 4 Upgraded Boardings per year when available
  • 20% discount on in-flight purchases made with your card

Southwest Companion Pass rules

  • You must earn 125,000 qualifying points or fly 100 qualifying one-way flights each year to qualify.
  • Qualifying points include: revenue flights on Southwest, credit card points, base points earned through Southwest partners.
  • Qualifying points don’t include: purchased points, points transferred from other members, points converted from hotel and car loyalty programs, e-rewards, e-miles, Valued Opinions, Diners Club, points earned from program enrollment, tier bonus points, flight bonus points and partner bonus points.
  • You should designate a companion at least 21 days in advance to receive a Companion Pass card before your flight. You’ll need the card to board your flight, and it’s nontransferable.
  • You may change your designated companion up to three times each calendar year.
  • Once you qualify, you can begin booking flights with your Companion Pass immediately, and it is good through the remainder of the year and the next calendar year (up to two years, depending on when you qualify).
  • You must pay for your flight with cash or points before you book your companion’s pass.
  • Your companion can’t fly without you – they must be booked on the same flight and dates. If you cancel your ticket, their ticket will also be canceled. Also, he/she will be charged for the fare if you don’t make the flight.
  • You have to pay for your ticket to bring a companion (i.e., you can’t use a companion pass to fly with a partner also using a companion pass).

How to get the Southwest Companion Pass

You may be surprised to learn that Southwest flights aren’t the only way to earn points. In fact, there are faster ways to rack up the points that you need for the pass. Here are some of your best options:

Credit card bonuses

The best way to earn a lot of Rapid Rewards points all at once is to sign up for a Rapid Rewards credit card and earn the card’s sign-up bonus.

However, you should be aware of Chase’s rules on applying for Southwest credit cards before you hit submit. Due to Chase’s 5/24 rule, your application likely be denied if you’ve opened more than five credit cards (with any issuer) in the past 24 months. You can’t earn the bonus on a particular Southwest card if you’ve earned a bonus with that card in the past two years. Also, you’re prohibited from owning two consumer cards at once – which means you can’t sign up for, say, the Southwest Rapid Rewards® Plus Credit Card and the Southwest Rapid Rewards® Premier Credit Card to earn two bonuses in a single year.

However, you can own a consumer card and a business card at the same time. If you can qualify for a business card (which is not as difficult as you may think – any sort of side income may qualify you), signing up for a business card along with another Rapid Rewards card will give you most (or all) of the points you need to earn the Companion Pass – you can earn up to 180,000 points with two cards combined.

Sign-up bonus
Southwest Rapid Rewards Plus Credit Card 50,000 points if you spend $2,000 in first 3 months; plus 30,000 points if you spend $10,000 in first 9 months
Southwest Rapid Rewards Premier Card 50,000 points if you spend $2,000 in first 3 months; plus 30,000 points if you spend $10,000 in first 9 months
Southwest Rapid Rewards Priority Credit Card 50,000 points if you spend $2,000 in first 3 months; plus 30,000 points if you spend $10,000 in first 9 months
Southwest Rapid Rewards Premier Business Card 60,000 bonus points if you spend $3,000 in first 3 months
Southwest Rapid Rewards Performance Business Credit Card 70,000 bonus points if you spend $5,000 in first 3 months; plus 30,000 points if you spend $25,000 in first 6 months

Note, Southwest changes the sign-up bonuses on its cards frequently throughout the year. Before you sign up for a particular card, you should check the history of the bonus on that card to make sure it’s at its peak.

Referral bonuses are another great way to rapidly accumulate points toward the Companion Pass. Chase offers 10,000 points per each friend who is approved for a Southwest card, up to 50,000 points per year. Even better, Chase recently updated its refer-a-friend offer for Southwest so that you earn a bonus on any card that your friend chooses to apply for, including the business cards, even if you don’t own that particular card. You can log into the Chase site to grab your Refer-a-Friend link to share with friends, family, and of course social media.

Southwest flights

Besides credit card bonuses and referral bonuses, flying frequently on Southwest Airlines is your next best bet for stacking up Rapid Rewards points. Depending on the fare, you can earn between 6 and 12 points per each dollar that you spend on Southwest airfare. You would need to spend between $9,167 and $18,333 on airfare to earn enough points for the pass.

Rapid Rewards points earned
Wanna Get Away fares 6 points per dollar
Anytime fares 10 points per dollar
Business Select fares 12 points per dollar

Rapid Rewards partners

Southwest has several travel and shopping partners through which you can earn Rapid Rewards points. For instance, many of Southwest’s car rental partners offer 600 Rapid Rewards points per rental. Also, the Southwest hotels portal is a great way to earn up to 10,000 Southwest points per night – all of which qualify for the Companion Pass.

Credit card spend

Your spend with the Southwest credit cards also earns points that count toward the Companion Pass. Most of the Southwest cards offer the same earning rate: two points per dollar on Southwest purchases (on top of your base point earnings), Rapid Rewards hotel purchases and car rental partner purchases, and one point per dollar on everything else.

Unfortunately, the overall earning rate with most Southwest cards is very low – amounting to around 1.08-percent per dollar for the average cardholder. At that rate, you’d have to spend around $101,851 on average on a Southwest card to earn the pass just through credit card spending – not a very realistic amount for most cardholders. Still, using your Southwest credit card is a good way to add incrementally to your earnings, especially for purchases that earn double points.

Additionally, the Southwest Rapid Rewards Performance Business Credit Card has a slightly higher earning rate than the rest of the airlines co-branded offerings. The Performance card earns 3 points per dollar on Southwest purchases, 2 points per dollar on social media and search engine advertising, internet, cable and phone services, and 1 point per dollar on all other purchases. That means small business owners who spend a significant amount in these areas can get a bit more value.

Southwest Rapid Rewards Dining

The Southwest Rapid Rewards Dining program is another good way to add incrementally to your point balance. You can earn up to two Rapid Rewards points per dollar by eating at qualified restaurants.

This is an especially valuable option for those who cannot travel right now due to current restrictions. You’ll still earn points for purchases made with qualifying restaurants when you order takeout or delivery from the restaurant itself.

Rapid Rewards shopping portal

You can earn Rapid Rewards points that stack on top of your credit card points (as well as other deals and discounts) by clicking on a retailer’s link through the Rapid Rewards shopping portal. The Rapid Rewards site includes many major retailers, such as Best Buy and Bed Bath and Beyond. The number of points that you earn varies quite a bit by retailer, but tends to range between one to four points per dollar. For instance, Bass Prop Shops is currently offering four Rapid Rewards points per dollar on online purchases. At that rate, you’d have to spend around $27,500 to earn 125,000 Rapid Rewards points.

Earning the Companion Pass on a moderate budget

While 125,000 points seems like a daunting number, when you add all these earning opportunities together, it’s actually quite feasible to earn the Companion Pass with a moderate amount of spend.

For instance, consider you earn the up to 80,000-point sign-up bonus and refer two friends to Southwest credit cards. Those two actions alone can earn you 100,000 points – a significant portion of the way toward the pass. To earn the other 25,000 required for the pass, you can leverage high-earning categories like Southwest flights and purchases in the shopping portal – putting all spend on your credit card to ensure you earn as much as possible.

Additionally, you can maximize your Southwest points by using your Southwest card on planned, recurring payments like select gas purchases or certain utility bills.

How to use the Southwest Companion Pass

Register your companion

As soon as you qualify, go to the Southwest website and designate a companion for your next flight. Make sure you register your companion well in advance of your flight – your companion needs the pass to board the plane, and it takes up to 21 days to mail. You aren’t stuck with one flying companion – you can change your designated companion up to three times per year. (You can do this online or instantly over the phone.)

Book a flight

To book a free flight for your companion, first, go to the Southwest Airlines website and book your own airfare with cash or points. Once your ticket is booked, you can add your companion to your reservation by clicking on the “Add Companion” option on Southwest.com. (Or you can call Southwest’s reservations line to book your flight and have a companion added over the phone.)

Check in at the airport

You must bring your Companion Pass to the airport to check in. You’ll be asked to present a photo ID for yourself and your companion. Be sure not to stand your partner up at the last minute – if you don’t show up at the airport, your companion will be charged the full price of the fare.

Tips for earning the Southwest Companion Pass faster

  • Sign up for credit bonuses when they hit a peak – Wait until the bonus on a particular card hits a peak, and then apply for it.
  • Sign up for two Southwest credit cards – Consider signing up for both a Southwest business and consumer card within the same year to earn all the points you need from sign-up bonuses.
  • Look for special deals – If you keep an eagle eye on the Rapid Rewards program, you can find some incredible deals that can allow you to get a large influx of points or even earn the pass with a much lower threshold. For example, Southwest sometimes offers additional points on airfare purchases. Also, in 2017, Southwest ran a promotion in California that allowed residents there to immediately qualify for the pass if they signed up for a Southwest credit card.
  • Take advantage of all your point-earning opportunities – Stick to flying Southwest Airlines (even for business trips) and make every car rental, credit card expense, online shopping experience and hotel stay count toward earning the pass.

Bottom line

That Southwest Companion Pass is in closer reach than you think, even while travel is currently restricted. The points boost for Rapid Reward members in 2020, plus earning options like the online shopping portal and dining program, keep the perk within reach for Southwest flyers. By keeping a keen eye on credit card sign-up bonuses and taking advantage of all the earning opportunities, many Southwest enthusiasts successfully earn the pass each year.

See related: What are Southwest points worth?, Southwest credit cards, Best ways to earn Southwest points, Best ways to redeem Southwest points, Southwest Airlines partners, Southwest A-list status, How to book a Southwest Rapid Rewards flight, Rapid Rewards Shopping guide

Source: creditcards.com