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Hi, I'm Rob West. But there's a growing strategy called credit card churning that may carry more risk than reward. Today we'll look at what it is, where the dangers are, and how Christians can think wisely about rewards, debt, and stewardship. Then we'll take your calls at 800-525-7000. This is Faith and Finance, biblical wisdom for your financial decisions.
Credit card churning is the practice of opening new credit cards mainly to earn sign-up bonuses. A person opens a card, spends enough to qualify for the bonus, collects the reward, and then moves on to the next offer. On the surface, it may sound clever. After all, if a card offers hundreds of dollars in rewards, why not take advantage of it? But for most people, the strategy is far more complicated than it appears.
Opening multiple cards can trigger hard inquiries on your credit report. It can reduce the average age of your accounts. It can create more payment due dates to manage. And many issuers have become much more restrictive with these offers than they were years ago.
Some have rules limiting how often you can receive a bonus. Others may claw back rewards if they believe the system has been abused. and even if everything goes according to plan, one missed payment, one overlooked annual fee, or one spending requirement that encourages unnecessary purchases can quickly erase the benefit. For most people, it's simply more effort than it's worth. A simpler setup, a reliable rewards card, a debit card, and perhaps a business card if needed, will meet most needs without adding unnecessary risk.
Now, that doesn't mean all credit card rewards are unwise. If someone pays the balance in full every month, tracks spending carefully, and already lives within a healthy budget, rewards can provide real value. A cashback card may reduce everyday expenses. A travel card may help with a planned trip. And credit cards often provide stronger fraud protections than debit cards.
But here's the key. Rewards should enhance good financial habits, not compensate for weak ones. A rewards card is not a solution for overspending. It's not a substitute for a budget, and it should never become an excuse to buy more than you planned simply to earn points. If you carry a balance, the interest will almost always outweigh the rewards.
So, when might it make sense to open a credit card? I consider it when someone already demonstrates financial consistency. They pay bills on time, they track spending, they are not carrying consumer debt, they have a stable plan for their money. In that context, a credit card may help build credit history and provide useful benefits. But I would caution against opening a card if someone is already carrying credit card debt, struggling to manage monthly expenses, recovering from mispayments, or tempted to spend more because of rewards.
Now, some may argue that rewards benefit financially healthy cardholders at the expense of those in debt. Others point out that rewards are often funded through merchant fees, which businesses agree to pay when they accept cards. I do think there's a moral dimension, but we should be careful not to oversimplify it. Rewards are generally tied to creditworthiness and financial behavior. Many households at all income levels can qualify for rewards by building strong habits, maintaining a good credit score, and using credit responsibly.
So the better focus is not shaming someone for receiving rewards, it's helping more people develop the wisdom and discipline to use financial tools responsibly. Credit card churning also reveals how personality shapes financial decisions.
Some people love optimization. They enjoy spreadsheets, rules, deadlines, and the feeling of winning the game. Others need simplicity and predictability. But personality does not determine financial faithfulness. Habits do.
Proverbs 21:5 reminds us: the plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty. Credit card churning often appeals to the hasty part of us, the part that wants quick gain, clever advantage, and immediate reward. But scripture calls us to something better, diligence, patience, contentment, and faithful stewardship.
So before chasing the next bonus, ask a better question. Does this help me become a more faithful steward of what God has entrusted to me? If the answer is no, it may be best to leave the reward on the table and choose the freedom of simplicity instead. Remember, the best financial strategy is not the one that squeezes every possible point out of the system. It's the one that helps you live faithfully, give generously, avoid bondage, and remember that everything you have belongs to God.
All right, a quick break and back with your questions after this. Stick around. At FaithFi, we believe that money is a tool to advance God's kingdom. When you become a FaithPhy partner, you help more people discover the freedom of biblical stewardship and the joy of seeing God as their ultimate treasure. As a thank you, you'll get early access to our newest studies and devotionals, our quarterly Faithful Steward magazine, and the pro version of the Faith Phi app.
Become a FaithFi partner with your gift of $35 a month or $400 a year at faith5.com slash partner. Is health insurance eating up your budget for 2026? If you're looking for ways to better steward your finances, consider this: Christian Healthcare Ministries is a health insurance alternative at half the cost. As a ministry, CHM allows you to share the burden of medical bills with other believers while also saving you money. Join CHM today and ditch traditional health insurance by visiting chministries.org/slash faithfi.
That's chministries.org slash faithfi. Yeah. Thanks for joining us today on Faith and Finance.
Well, in just a moment, we're going to begin taking your calls and questions today. The calls have started coming in, but we still have room for you at the moment. If you'd like to get in on the conversation, now is the time to call. Any financial topic today, perhaps debt repayment is something you're wrestling with. Maybe it's preparing the next steward.
You know, this idea that we would leave an inheritance to our children's children, you know, when that was written in God's Word, that was not related to financial inheritance. It was largely related to a spiritual inheritance, a legacy of faith passed down, devotion to Yahweh. And we have the opportunity as we prepare the next steward to prioritize wisdom over wealth. But here's the thing: if wisdom accelerates faster than wealth, and they're prepared to receive the inheritance, if you leave a financial inheritance, well, the outcomes are going to be far more God-honoring and Productive for that steward because that's what we're preparing. We're preparing the next steward, but we can't just choose them, drop a lot of money in their lap, and hope that everything works out.
Our job is to journey alongside them, to introduce them to Jesus, to introduce them to a biblical worldview of money management.
Well, what does that look like?
Well, we can certainly talk about that. Maybe it's investing for you or preparing for retirement. Whatever you're thinking about today, you can call right now: 800-525-7000. Again, that number is 800-5257,000. We would love to hear from you today.
Before we head into those phone calls in the news today, lawmakers are considering a bipartisan bill that would expand the ways retirees can donate to charity from their IRAs.
Now, you're familiar on this program with the fact that individuals ages 70 and a half and older can make qualified charitable distributions, what are known as QCDs, which allow direct transfers from an An IRA to a nonprofit, your church or a ministry. These donations can count toward the required minimum distributions and are excluded from your taxable income.
So you don't get the deduction, but it's even better than that. You just never pay the tax on the money in the first place, which means, remember, I put it in pre-tax because it went into a 401k or an IRA, I got a deduction. And normally, every other distribution from an IRA adds back to your taxable income, what you're taking out. The QCD avoids it altogether, it goes straight to the charity. You never pay tax on it.
That means more into the kingdom.
Now, the proposed legislation would allow QCDs to be directed to donor-advised funds. We talk about those a lot too. That's the charitable checking account that provides an immediate tax deduction while allowing donors to distribute funds over time.
So, supporters say this adds flexibility and could increase giving. Critics argue donor-advised funds lack required payout rules, meaning the funds could sit unused for years, unlike direct charitable donations.
Now, despite this concern, QCDs remain a highly tax-efficient way to give, often offering greater benefits than traditional charitable contributions, especially for retirees. Managing required minimums and tax brackets.
So be sure to familiarize yourself if you're 70 and a half or older or you're close to that with the QCD idea. Here's the thing: even if you just replace the giving you're doing with after-tax dollars out of checking and savings with the money coming from the IRA and you just give the same amount, it's far more efficient because, again, it allows you to get that money out of that tax-deferred environment without ever paying any tax.
So, hopefully, that helps you today. All right, we're going to dive into your questions. Lines are open. We're ready. 800-525-7,000 is the number.
Let's begin in Indiana. Terry, go ahead. Thank you for taking my call. Of course. My question is: I sold my camper.
After my last camping trip last year, and I put $5,000 just in my bank savings account, which is very low savings interest. And this is basically the only emergency fund that I have and I'd like to grow it. And so I would like to know how to go about finding a higher interest savings account that is liquid enough that I can use it for emergencies with no penalties. Yeah, excellent. I love the way you're thinking here because to your point, moving this money to a high-yield savings account or money market can be a great upgrade for your emergency fund.
You keep the safety, you keep the liquidity, but you earn much more interest. And this can make a real difference, Terry. We're talking $5,000. You know, if you're earning 0.1%, we're talking $10 a year on $5,000. A high-yield account at 4% could generate $200.
So that's a meaningful difference for doing almost nothing extra.
So essentially, it works in the way that because a lot of these institutions don't have the brick and mortar banks, they're able to keep the overhead lower and offer higher rates. The interest compounds over time. Rates do fluctuate with the market, but that's true of just about anything. And they're safe because we're either talking about An FDIC insured account or a private insured account in both cases up to 250,000.
So that gives you peace of mind without any market risk like stocks and a high degree of safety. And then usually you have great access. I mean, typically you would link it to maybe your primary checking and you could do an easy transfer over to your checking electronically. Usually gives you access fee-free within one to two business days, but you almost don't want the money too accessible if it's your emergency savings because we really want to leave it there and not touch it unless it's a true emergency. A couple of options for you on where to go.
Our friends at Christian Community Credit Union, now Adelphi Christian Banking, they've merged. They're now by far the largest Christian banking option in the nation. Very highly regarded and respected. They've been a longtime partner of ours here. You can learn more at faithfy.com/slash banking.
They have, for instance, a high-yield money market at 4%. For up to $100,000 for 12 months.
So you've got strong returns, convenient access to the money, and peace of mind because there's private insurance protecting it. And if you use the promo code FaithFi, they're offering up to $400 more with new accounts.
So just by being a listener, you can have a bonus added to it. But that's a great option for you to be able to maximize that yield and be with somebody who shares your values as a Christ follower because they take a portion of what they receive just as they lend the money out and so forth and put that into kingdom building activities. The other option, if you just kind of want to look at the landscape, you could go to something like bankrate.com or nerdwallet and just look at the various options of what the high-yield savings accounts that are out there from the online banks are offering with FDIC insurance. And then bankrate.com has a five-star rating system.
So you could see how they stack up just in terms of customer service and their tech platform. And those kinds of things.
So I think either of those would be good, but I'm in favor of this direction you're headed. Great. Great. That's great information. Awesome.
Well, Terry, I appreciate your call. Again, that website, if you wanted to check out CCCU, it would just be to faithfi.com slash banking, faithfi.com slash banking, or you could go to bankrate.com if you kind of want to look across the entire landscape. Lord bless you.
Well done on building up this emergency fund. And I think you're headed in the right direction here as you think about maximizing that yield. No reason not to do that. Thanks for your call today.
Well, folks, we're up against our next break here. Our goal in this program each day to help you see God as your ultimate treasure, to be theologically sound. To be encouraging, to provide wise counsel, but also to be expert in the advice that we give because we know that it's rooted in truth because our source for that, God's Word. We're going to be back with much more just around the corner, so don't go anywhere. We're just getting started today.
We'll be right back. Have you ever started a budget only to watch it fall apart a few weeks later? You're not alone. The FaithFi app is the leading Christian budgeting app, combining smart budgeting tools, automated budgeting, and personalized insights with daily rhythms of scripture, short devotionals, and guided reflection. Manage God's money God's way.
Start your free 30-day trial today to lock in 25% savings for a limited time at faithfy.com slash app. Faith in Finance is thankful for support from The Good Investor, a book by Robin John. In his book, Robin shares his journey from an immigrant child struggling in school to co-founder and CEO of Eventide Asset Management, a faith-based investment firm. This Faith and Work memoir seeks to inspire readers to view their work and investments as opportunities to honor God and bring blessing to the world. More information is available at goodinvestor.com.
That's goodinvestor.com. Great to have you with us today on Faith and Finance. We're taking your calls at 800-525-7000. All right, let's head back to the phones. We're going to head out to Texas.
Brooksey, how can I help? I was debating trying to get a car But with the interest rates the way they are now, I have a car dealer that recommended that I wait, and I've been waiting since November. And I know the interest rates are better on a new car. and not on the used cars. But I'm seventy-eight and my granddaughter is needing another car my old car, and so I was debating when to do it.
I do have money in the IRA. I have maybe 30,000 in local banks.
So it's just trying to debate what to do. I see. Yes, it's a great question, and I can understand the dilemma here. Here's my advice: you know, it's really about affordability, simplicity, and minimizing risk, you know, not necessarily getting quote the best deal. I would avoid waiting for rates.
There is no guarantee rates will drop soon. In fact, the trajectory that we're seeing from the Federal Reserve is that we may not even get a rate reduction over the balance of 2026. And you may need, or your family member may need, the new car now. Prices could change.
So I would rather you focus on what you can afford today, not trying to time the market, especially just given all of the factors that are leading us to believe that rates probably aren't going anywhere in any meaningful way anytime soon. You are correct that new cars offer rates that are lower. The manufacturers often offer the lower. And you have though a higher purchase price and faster depreciation.
So, although you may quote save on the interest as an incentive, you're typically gonna still spend more overall.
So, usually, the better financial decision is the used car: the lower purchase price, the slower depreciation, even with a slightly higher interest rate. Often, that leads to the total cost being much lower.
So, I think the best overall approach is to say, how can I buy or find a reliable used car and minimize the financing? And let's try to keep monthly expenses low. Let's try to reduce financial stress. Let's avoid long-term debt. If you need to finance, let's avoid stretching the budget and make sure that you get something that fits, even if that means you delay slightly and continue to save.
But it sounds like you do have some resources available.
So let's talk through what you just mentioned there. You mentioned you had a savings and a retirement account. Give me the breakdown of what you've got. I have thirty thousand probably in local banks. I have a RA that well, this is backways, it's two hundred twenty six thousand dollars.
And uh When I talked to them last, they did mention that they could cash in some of the lower risk. And you know, use that. But I know that at the end of the year, I'm going to pay for that. Yes, yeah, that would be a taxable event. If you did buy, and is this car for you or your family member?
Well, I'm giving my old car to the family member. I'm getting the new car. I see. And I need it for safety reasons, too, because my car's older.
Okay.
So, how much would you be looking to spend? Have you been out kind of shopping around?
So, if you were to buy a used car, even with that higher interest rate, do you have a sense of what you would be spending to get something that's reliable, maybe three to four years old, but that meets your needs? I looked online and my son and I went and talked to the local Honda place, and of course, they're pushing their newer cars. But I would like to start in, you know, to twenty four thousand instead of, you know, up. They go up to 40. We were looking at Hondas and Toyotas.
But I'm wondering too if I oughta just you know not just focus on that brand, you know, maybe go some other place with that Yeah, I think that's wise. I mean, certainly Toyota and Honda have a good reputation for good reason because of their reliability. But there are other options that are going to be a little less expensive, maybe Kia or a few others that have nice warranties on them on the new side and some of them still on the older side. And I think, you know, given you wanting to spend in that roughly $24,000 range, you know, you have the option to just pay cash for that. I wouldn't, you know, pull your emergency savings down to $6,000 because I'd like for you to have at least, you know, preferably you'd want three months' expenses.
So, you know, you'd probably want to leave that right where it is because if you're spending $5,000 a month, six months' expenses is $30,000.
So you have a fully funded emergency fund, but you could go ahead and pull it from the IRA or maybe split it in two. Maybe you do half from the IRA, which is $12,000.
So that'd be Be a minimal tax implication, and then $12,000 from the savings, which allows you to not take on a monthly payment. Maybe you dial back your spending slightly, but you focus on building that emergency fund back up to the 30,000 with what you would have spent for a payment.
Now you're not borrowing anything, you're maintaining your simplicity, you're keeping your budget strong, you still have a surplus on a monthly basis. And the idea that you would spend somewhere between 20 and maybe 27,000 on a two- to four-year-old Toyota Camry or Honda Accord is not unreasonable. And that means the modern safety features, the low maintenance, the long remaining lifespan. And you could even perhaps get a little bit better discount on it by paying cash as well.
So, what are your thoughts on that, though? I was going to ask you, my son recommended that even borrowing against myself. Is that viable too? It really isn't. I mean, if you had a 401k, you could borrow against it.
I wouldn't recommend that though. I'd rather you, and that option is not available with an IRA.
So I think what I would look to do is, again, I'm thinking if you use that budget of $24,000, then pulling half from each one still gives you a nice, strong emergency fund, because that would leave $18,000, which gives you more than three months' expenses, gives you a minimal amount that you're pulling from the IRA, which basically you're just taking some of the profits that you've probably enjoyed the last few years. And you don't have a whole lot of tax burden, but you still got a surplus on a monthly basis, plus a newer car that's safer and more reliable.
So you should be able, especially if you kind of buckle down on your spending, to replenish that emergency fund over time. Yes, I understand. And I think too if I Had a payment, I would come more likely thinking not to spend foolishly per West Green.
So, yeah, I mean, that's the other option. You don't touch the IRA, you pull the $12,000 as a down payment from the savings, and then you take on a small, you know, monthly payment with the loan. But, you know, I don't know why, you know, it seems like just given what you've got there, the fact that you don't need it, you're living within your means, and maybe you could even get a little tighter, you know, maybe just going ahead and paying for cash. And pulling in part from the IRA does make some sense. I hope that helps, Brooksy.
Thanks for being on the program today. Lord bless you.
Big thanks to Lisa, Jim, Dan, and Dorena. We'll see you tomorrow. Bye-bye. Faith in Finance is provided by FaithFy and listeners like you.
