Return To The USA - PART 1

Return To The USA - PART 1 Cost And Travel


Coming Back To The USA From The Philippines

You have been in the Philippines for five or ten years. Maybe longer.

You may not have driven a vehicle in a decade or more and your US state license has expired.

You may have cancelled all of your credit cards and you have no idea what your current credit profile looks like.

Maybe you never intended to leave the Philippines, but now you have a reason to return to the states.

Maybe you have a son or daughter who will go to college in the US. 

Or maybe you just decided that you want to work again.

But your latest work experience is a decade old and you have no current references?
Returning to the US after a decade living in the Philippines can be a daunting challenge.

Your resume could be irrelevant and your prospects slim.

Before you move to the Philippines you should start planning your return home to America. You need to do this even if you are sure that you will never go back.

Everything changes with time. 

My Contingency Plan For Returning To The USA

This post zeroes in on cost and credit related items that need to be cleared up weeks, months or years before a trip back to the states.

Don't wait until the last minute to consider your credit profile. It can take a long time to fix a problem that you don't even know that you have.

I suggest getting acquainted with your credit report and the credit bureaus as detailed in this post

Don't wait. You should be doing that now.

Have you been in the Philippines for many years and closed all of your US credit cards at some time in the past?

Do you have a low credit limit. Do you have bad credit? Do you know? 

You might need a year or longer to get your credit into shape. It could take anywhere from days all the way to eternity to get your credit shaped up for a trip back to the US, depending upon your situation.

If your credit profile is in particularly poor shape or you do not have any active credit accounts, then you may need to start building it up with a secured credit card:
A secured credit card is a type of credit card secured by a deposit account owned by the cardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount of credit desired. Thus if the cardholder puts down $1,000, they will be given credit in the range of $500–1,000. In some cases, credit card issuers will offer incentives even on their secured card portfolios. In these cases, the deposit required may be significantly less than the required credit limit, and can be as low as 10% of the desired credit limit. This deposit is held in a special savings account. Credit card issuers offer this because they have noticed that delinquencies were notably reduced when the customer perceives something to lose if the balance is not repaid. 
After a few years of little to no activity on your credit report you become an unknown risk to the card companies. Those credit cards that you maintained a good payment history with will stay on your report for ten years after having  been closed giving your credit rating a boost. The bad ones only stay on the record for seven years, which could also work in someone's favor. Even so you may find it difficult to obtain a new card.

A secured card is one of your options when that happens. It may take a year or two but you can build that initial secured card with a $500 limit into a couple of unsecured cards with a $10,000 limit or more.

For me,  a $10,000 credit limit is the low end of what I would consider as necessary for a return to the states (augmented by cash reserves and ongoing income). More would be better. You need to determine what you need and start working to get your credit limit and cash reserves up to that number.  

Most of the big ticket items required to make a trip to the states either require a credit card or work a lot easier with one than without one. 

The following are just a few of the items to think about for calculating a budget for a return to the States.

Air Fare For The Flight Back To USA

I would figure on $1500 per person for a one-way ticket from the Philippines to the US. This is an economy ticket plus all expenses from our door in the Philippines to our door in the US. It seems high but I want the padding. 

You can play around with different departure and arrival cities or different dates to get a lower fare.

Also, check the travel insurance offered by your credit card.

Hotel Lodging Before And During Travel

I would program in four nights of hotel rooms in the course of my door-to-door travel from the Philippines to the US at $100 per night. 

Rental Car When You Get To USA

An alternative to renting a vehicle from an airport location is to take a taxi or shuttle to your lodging and then rent a vehicle from a non-Airport location. Check online for the prices of different rental companies near your lodging and you will probably find them cheaper than the airport. They may even deliver the car to you where you are staying.

Whatever arrangement is made should be made well in advance. Not, for instance, the day of arrival.
You are generally required to use a credit card to rent a vehicle, but some rental companies will allow you to use a debit card.

Some rental companies do a hard-pull on your credit file before they rent to you – another reason to keep your credit profile in good shape. There are other companies that do not check credit.

You need to do your own research in making your decision about the rental car company you choose. 

First Quarter Finance has some good information about which companies check credit and or allow debit cards. If those details were really important to me I would also verify them directly with a rental company because policies change.

I would program in a minimum of $300 per week + $100 per week for insurance and fuel for a rental vehicle to use while I search out a permanent vehicle to buy. I would count on using the rental car for four weeks. You need to keep in mind that just because they let you rent the car and drive it away does not mean that you are ok on insurance.

Rental Car Insurance

The collision damage waiver and liability insurance that rental car companies offer at the time of your rental can be a little pricey. Normally, you would be covered by the insurance that you have on your daily driver auto. However, if you have been living in the Philippines for years that likely does not apply.

Many credit cards will provide the collision damage waiver as a free benefit if you book the rental with the card. You need to become well acquainted with the fine print in your card’s policies regarding what is and is not covered by the “free” CDW that comes with your card. 

Keep in mind that if you do damage the rental car you will have to settle that cost before you can file any claim. 

This is true even if it's the other guy's fault.

If you rent a $25,000 vehicle and total it you may be asked to settle that plus other costs with the rental company immediately. Can your card limit handle it?

Liability Insurance is potentially more important than CDW. I would not want to start off my return to the states by having to pay tens of thousands of dollars due to an accident for which I did not have liability insurance. 

I have three options for obtaining insurance on a rental vehicle.

1. Buy It From The Rental Car Company 

My first option is to pay the $10 or so per day for the rental company’s in-house liability insurance coverage. CDW would cost about the same at the rental desk. 

Again, with caveats about what is and is not covered.

2. Non-Owner's Auto Insurance Policy 

In advance of traveling to the US and perhaps before you ever come to the Philippines you could acquire a non-owner's auto insurance policy. Apparently, there are people who maintain non-owner's auto insurance policies, while living overseas. This type of insurance could be useful for intermittent rentals and also to make it easier to transition to an owner's policy when you buy.

I do not know how difficult it would be to call up an insurance company after living in the Philippines for 10 years and ask them to write me a non-owner's policy, but they might be able to do it.

Be aware that your driving record is a lot like your credit record and even more sensitive to a blank spot. After a few years of lapsed coverage the insurance companies may evaluate you as the same way that they reckon someone with no driving history. They have to account for an unknown risk and they will do that with higher premiums.

3. Buy A Car Online And Have It Waiting For You

Avoid the rental car and find a permanent vehicle on a site like Cars Direct. I could buy the vehicle and coordinate with an insurance company to have my vehicle covered perhaps even before I walk out the door of the airport. 

I did this before and Cars Direct even picked me up from the airport.  Actually, it was the net sales rep from the dealership who picked me up. 

That was one of the vehicles I sold before coming to the Philippines. I had it many years and it never gave me a single problem.

I would definitely try to make this option work if the time ever comes.

I am not trying to sell you on Cars Direct. That's just my example from personal experience. You have other choices. 

Temporary lodging Upon Arriving In The US

If you do not have permanent housing lined up, then you will need to book temporary lodging, perhaps with an extended stay type hotel or a month-to-month apartment/condo. For my purposes, I would count on no less than $500 per week for temporary lodging and I would plan on four weeks at that rate before I could secure permanent housing. 

I would definitely have the temporary lodging settled long before I depart for the US.

Long Term Rental

Many landlords require that you have a minimum credit score. What if you pick out a nice place only to discover that the landlord requires you to have a minimum credit score of 700 and you do not even know what yours is? You can prevent that by reading my post on protecting your credit

In planning for long-term housing, I would count on paying out a minimum of $4000 to cover first month, last month and security deposit. I would also be prepared to pay this in cash, just in case. 

Like leapfrogging a temporary car rental and buying a permanent vehicle, I would try to skip temporary lodging by lining up permanent housing before the trip. Admittedly, it would be a lot harder to settle on a permanent home to live in site unseen and from thousands of miles away.

Estimated Initial Cost To Return To the United States

summary of factors for deciding a minimum credit limit

In planning for my credit build-up for my trip back to the US I am already at $12,500. I went over my $10,000 limit. That is not a problem, because I would not be letting those charges sit and accumulate on my card. I will be paying down the charges as I go and not waiting for the due date. I would have made the flight reservation months ahead of time and that part of the bill would be paid by flight time.

I added 40% to my total to account for those things that I cannot foresee.  

In a future post we will look at purchasing a home, instead of renting. 

I have also considered a 5th wheel or travel trailer in my Return to the US contingency plan. This alternative can quickly run into a six figure solution. In addition to the trailer, I would need to upgrade the vehicle I planned to purchase to something like maybe an F-350.

The Bottom Line

This has been a partial list of what I need to consider when planning for how high I would need my credit limit to be. It is always better to estimate high and be pleasantly surprised than to low ball and get in to trouble. 

You may notice that I spent half of the article talking about the rental car. That is because that is one of the most overlooked lurking dangers of travel. The insurance issue bites a lot of people when the unexpected strikes. 

 Look for Part 2 that covers work and college for the kids.

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