Kill that Unused Account

Americans have an average of four credit cards. Do you really need that many?

And how many is enough? Hi, I'm Rob West. Too often we hang on to credit cards we no longer use, providing an unnecessary invitation to identity thieves to run up charges in your name. Canceling them is a good idea if done properly. I'll talk about that today, and then it's on to your calls at 800-525-7000.

That number is 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well, Christians should always take Proverbs 10-4 seriously. It reads, Your credit score will drop a little after closing an account.

Most people are surprised by that because it seems like you're being punished for doing the right thing. But it really comes down to mathematics and complicated computer algorithms. To find out why your score drops, we'll have to simplify things. So first, a definition.

An algorithm is just a set of rules that solve a problem in a limited number of steps. Algorithms live in computer models that give you more credit score points for having three things. Long-standing accounts, more available credit, and more kinds of accounts, like a credit card, auto loan, and mortgage. If closing an account falls under one or more of those factors, your score goes down. So just remember, the longer you have an account open, the more credit you don't use, and the more types of accounts you have, the higher your score. In fact, those three factors make up 55% of your FICO score.

Now why is that? Well, it's simply because having old accounts, unused credit, and more kinds of accounts tells lenders that you're more likely to pay them back. But is this really something to worry about when you close an account? A slight drop in your credit score?

Usually not. But there's one occasion when it could be important. If you're shopping for a mortgage or some other kind of loan, you want the highest score possible. Lowering your score by even a few points could put you in a lower range of scores, and that could affect the interest rate you get on the loan. A higher interest rate means money out of your pocket every month. But in most cases, when you're not seeking a loan, a slight drop in your credit score means very little. You'll quickly make that up if you keep the outstanding balances below 30% on remaining accounts and you make your payments on time. So you may be asking, why bother closing an account after you've paid it off, especially if it's going to cost you points on your credit score? Well, there are at least two good reasons. First, it eliminates the temptation to use it if you run into an unexpected financial problem.

That's what your emergency fund is for, and you should use that money if the car breaks down or the water heater starts giving you cold showers. I've already mentioned the second reason to close an unused account. It's the constant threat of identity theft. If your account is hacked, it'll cause you a lot of headaches, especially if it's unused and you're not paying any attention to it. Now, even though I said go ahead and close an unused account and don't worry about your credit score, you don't want to close several of them at once, even though that would feel really good. Closing a bunch of accounts at once will multiply the negative effect on your score. The best way to close unused accounts is gradually, no more than one or two every six months.

That way you spread out the negative impact while at the same time minimizing it by keeping low balances and making on-time payments with your other accounts. Now, here are the steps to closing an account and making sure it's closed. First, pay off any remaining balance, then check any recurring charges on the account and cancel or transfer them. After that, call your card issuer and tell them to cancel the account. You may want to follow up by writing an email or letter to your credit card issuer to confirm your card's been canceled. Finally, double check your credit reports at all three credit bureaus, Experian, TransUnion, and Equifax to make sure the account's been closed. You can get them for free at AnnualCreditReport.com. Okay, so that's why you should close an unused account and how you should do it. And again, don't worry about how it affects your score. Hey, have you checked out our new FaithFi app?

You can use it to manage your money and get a clear picture into your spending and perhaps make sure it's going where you want it to. You can learn more at FaithFi.com, just click app. All right, your calls are next, 800-525-7000. I'm Rob West and we'll be right back. Stay with us. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific situation. Great to have you with us today on Faith and Finance Live. I'm Rob West. All right, it's time to take your calls and questions today.

The number to call 800-525-7000, that's 800-525-7000. We'd love to hear from you today. You know, we started today by talking about closing out those credit cards. That often raises a host of questions around any number of things, especially related to your credit score, paying down debt, how you manage your credit cards and not open yourself up to unnecessary opportunities to be scammed or to have your information compromised. So we want to help you with those kinds of things, but the bigger idea is to get you pointed in the right direction with regard to managing God's money wisely. So whatever you're thinking about in your financial life today, we'd love to hear about it. We've got some lines open.

The number to call is 800-525-7000. Also coming up a little later in the broadcast, Bob Doll will stop by today. We're looking forward to hearing from Bob. A lot going on in the markets, particularly the Fed's favorite inflation indicator has been updated.

So we'll look forward to hearing Bob's take on that. Also, global equity returns. Bob is expecting returns to moderate in the decade ahead versus the last two decades. What does that mean for your investments and how should you plan accordingly? And growth has started to rotate outside of the U.S., which has put some pressure on the U.S. dollar.

What does that mean for our economy? That and much more coming up in our final segment today with Bob Doll. We'll look forward to hearing from Bob. In the meantime, let's head to the phones. We'll begin in Morgantown, West Virginia.

Chuck, go ahead, sir. Yes. We have received a letter from a company that the title of the letter says, order to resolve potential claims, oil and gas interest.

And then the body of the letter talks about wanting to give us a quick claim deed for they'll pay us a thousand dollars. And I'm just not sure whether this is something we need to proceed with or is there something that we need to be concerned about here? Yeah. Yeah.

You know, this really is a legal matter at the end of the day. Is this a company essentially wanting you, Chuck, to sign what is probably a limited quitclaim deed allowing them to drill for oil and gas? Is that right?

I don't think they do drilling. I think they just are buying mineral rights in our state and in Ohio and Pennsylvania as well. OK. Yeah.

Yeah. You know, I would probably bring a real estate attorney into this process before you go any further. I mean, the first question is, you know, who is this company?

Are they legitimate and reliable? So you need to do some due diligence there. You'd probably want to talk, if possible, to others who have done the same thing. Find out what the opportunity is here. I mean, given that this was unsolicited, is this something you're wanting to sign over?

And is that a fair and equitable price if you are? And so I think, you know, having somebody that can navigate this with you to understand your rights, what you're giving up legally by doing this, and then ultimately exploring if you did want to consider something like this, whether this is the company to work with. You know, the company could end up selling those rights and then somebody could end up drilling eventually. And so you just have to be careful about the long term implications of what you were doing here. And so I think that's why getting some wise counsel before you do anything would be the best next step. Do you have an attorney that, you know, in the area that could look over this for you and advise you? No, I don't have a personal attorney. I would have to get a reference. OK. All right. Well, I would look for a real estate attorney in the area.

You could call your church and see if there's one. You could contact a certified kingdom adviser in the area and ask for a referral. But I think that's your next step is just to understand from a real estate attorney, what would I be giving up? What are the implications to that now and in the future?

And what is the appropriate amount for this to be valued at? And then ultimately, is this the company to work with if, in fact, that's your your decision is to proceed? So I would go slow. I think there's a lot more due diligence that needs to happen here.

But nothing wrong with this at face value, as long as you understand all the implications of it down the road. If you need a C.K. to help you get to an attorney, you could go to our Web site, faith five dot com.

Click find a professional at the top of the page. Chuck, thanks for your call, sir. We appreciate it to South Florida. Hi, Melvin.

How can we help? Hey, good afternoon. Thank you for taking my call.

You're welcome. Calling you. I'm 20 plus years before retirement. And, you know, I, I try the same for my family and I. And currently we have projected by the time I retire, if everything goes well, based on what I'm saving, we should be like at two point eight million in retirement, which I hear is great question that I have. Can you say too much? Like at times we're kind of almost broke. If you want to look at it like on our current checking account, because I put in a lot of money or as much as we can on savings, is that.

Unbalanced, like I'm going the other way. Yeah. Yeah.

Yeah, I think you can, Melvin. I mean, I think this idea of over accumulation is absolutely possible. And so thinking about setting a financial finish line is very appropriate.

You know, retirement is not just around the idea of the mindless accumulation of wealth. We just, you know, the goal is more than we have today. And I don't think that's the right approach. I think the right approach is to say, let's give a prayerful and thoughtful approach to what do we ultimately want to save as a goal?

And then let's have a reasonable plan to get there. And we want to think through what are the implications to that because to your point, you're, you know, potentially robbing yourself of what you need today just to maintain whatever lifestyle you think God has called you to, including the enjoyment piece of what God has given you, building memories with family members and creating experiences, maybe traveling and taking a vacation from from time to time. But then also this idea that we might want to prioritize giving today. And to the extent we're putting everything toward the future, we may be missing that opportunity to do some current giving that the Lord may be leading you to.

So I think it starts with really what lifestyle has God called us to? What would it look like for us to maintain that lifestyle in this next season of life? Whatever that might mean, whether you're moving away from paid work or not. And what's the appropriate amount of accumulation to be able to reasonably, you know, maintain that income level in retirement, recognizing that Social Security was only intended to cover about 40 percent of your pre-retirement income. Most people live on about 80 percent of their pre-retirement income. So if Social Security is only half of that, how are you going to make up the other half or more? And that's got to come through your savings. And so there is a way, I think, on paper to get there in terms of what that financial finish line is.

You will hear advisers saying, you know, 10 to 12 times your income is probably a good starting point. And there's some, you know, rationale behind that. But that doesn't mean that's right for everyone. And so I think that's why you've got to really think and pray through this. Do you have an adviser, Melvin, who can advise you on this? Yes.

OK. I would bring this question to that adviser and hopefully that adviser understands your values as a believer, understands the heart of God, this idea that we need to save appropriately. It's not just about saving as much as we can. And so I think if you start with that idea that we want to define our finish line, what is that number? Help us get there.

That's the question to have. We'll be right back. Hey, thanks for joining us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today, 800-525-7000. Let's head right back to the phones to Naples and talk to Dee. Hi, there.

Go right ahead. Hi, Rob. I hope you can help me because I'm really sick over my situation. In 2013, my husband passed away. Some friends recommended their company to invest with. I had no debt whatsoever and never I haven't had that since I was in my 30s. And I bought many houses and paid them off and flipped them in leverage and all that. And so almost a year ago now, I found out that I had lost over a million dollars and it has left me with about 375 because I live in a very expensive retirement community that was under construction. And I really felt that the Lord wanted me here because I didn't want to move here. I really just felt he wanted me to bring a Bible study in and witness and et cetera.

It was near a church that I one time had affiliation with and everything's been going just right and beautiful. And then when I found out I lost this money, I'm left with enough money to if I buy absolutely nothing other than pay my rent, which is very high. It cost me four hundred and twenty thousand entrance fee to live here, which is nonrefundable. And so if I have enough money, if I do nothing but pay rent for maybe three or four years on 81.

And I just wondered, do I have and I don't think that they were thieves or anything. I think I just fell through the cracks when I said to my broker, what in the world happened? He told me that I just wanted to be conservative. But between 2013 and 2020, everyone was making money and telling me I should go to their broker, their broker. And I said, no, I really this was highly recommended and I trust them. And so I didn't change to all the other brokers. And so and I lost I don't know.

I just don't know what to do. Yeah, I'm so sorry to hear about that, D. So what period did you say you started investing roughly what time? I signed up at the end of 2013 and I don't think any investments began until the beginning of 2014. All right. And what was the initial balance you transferred in?

Pardon me? What was your initial starting balance, roughly? Maybe five hundred. But then I sold my house and I had my entrance fee. When I sold my house, I got almost a million dollars and it was clear. And I just put that into the same company.

And that's where the three seventy five comes in at. OK, so you put in one point five million and how much did you take out? I don't get anything but Social Security and I took out about three thousand a month. And then since I've lived here, I've been taking five thousand a month because my rent's forty seven little over forty seven hundred a month. OK, but did you didn't you say you pulled out a large amount for the entrance fee?

Yes. Well, that was out of out of the almost two million. OK, so other than the amount you're pulling monthly to live on, which was three thousand a month now, it's five thousand. If we use the starting balance of one point five million, you really haven't taken any large sums out of the one point five except the monthly. Is that right?

Yeah, well, and the four twenty to move in here. So you did take four hundred twenty thousand out. Yes, from the initial amount.

I didn't I opened in twenty fourteen. It would have been about five hundred and some thousand. And then with the sale of two properties that were both clear, that's where I came very close to two million. And I spent four twenty to move in here and then my monthly rent. OK, so you started with five hundred, you went up to two million and you took out four hundred. So you got about one point five or so invested. And then you took out the additional monthly, which is probably somewhere around four hundred and fifty thousand just because we've got ten years.

Most of that at three thousand a month. No, I've only been I've only been here three years, not even three. OK. Yeah. So here's the thing. I mean, it's going to be a little difficult, sounds like to establish kind of what your true cost basis is. But if in fact you've got you had one point five million invested and let's say you took out a few hundred thousand over the years in monthly income, you know, the fact that you'd be down at three hundred seventy five seems dramatic. So I'd want to know a bit more. Doesn't mean anybody has defrauded anybody. It doesn't mean they've necessarily done anything wrong. But it is a bit concerning, even though the bond market has been under quite a bit of pressure the last couple of years.

Something doesn't sound quite right. And so I think you have a very appropriate request to say, I need to understand what happened here. I need to know what was the total amount invested. So all of the deposits less any withdrawals and then obviously the difference between that number and the market value of the portfolio today is going to be the profit or the loss from the investments. And you need to see what that profit or loss is and what percentage is that versus what the bond market, if that's what you should have been, you know, if they said you were invested versus what is the bond market done.

Just understand why has the account performed the way that it has, because you have concerns over that. And let the adviser explain to you, here's what it was invested in. Here's how much we had to work with minus what you took out. Here's how the market did. Here's how we did.

And here's our rationale as to why that happened. Now, at the end of that, if you feel like something was done incorrectly, somebody made a mistake, the investments were not appropriate. Or, and this would be a worse case, somebody's actually done something, you know, illegal. Well, then there's a way to submit that complaint. I would start with your broker or adviser's firm after you talk to that adviser, either their branch manager or compliance department, let them know you have a concern.

You can file a complaint with FINRA, F-I-N-R-A, and then if need be, you may have to hire an attorney. But I think you've got a few steps before that just to figure out what happened and why and give that, the adviser, the chance to explain that to you and see if there's a logical explanation, perhaps something that you're missing here. Dee, all the best to you.

I know this is frustrating. We appreciate your call. We'll be right back. Thanks for joining us today on Faith and Finance Live.

I'm Rob West. We're taking your calls and questions today, 800-525-7000. Just ahead, Bob Doll will stop by in the next segment. Bob will update us on the markets, inflation. What about equity returns, stock market returns over the next decade? Bob has some thoughts on that. And China trying to export its way out of an economic slowdown. We'll talk about the implications on our economy there as well. That's all ahead with Bob Doll in the next segment.

Let's head to Lady Lake, Florida. In the meantime, John, thanks for your call. Go ahead, sir. Yes. My name is Joe and I found interest in your topic today. We talked about the impact of credit scores and closing credit card accounts.

Sure. And I went through a process of rebuilding credit and some of the cards I picked up in that building process were purchased by another large credit card company. So in the end result, I've got multiple cards from one card issuer. And I'm curious what their reaction will be if I wanted to transfer the credit lines into one and consolidate. Is that going to screw up the credit score, which, you know, years ago banks would do that just in the blink of an eye.

They didn't care. You could ship a credit line from one account to another or whatever, you know. Yeah, I don't think they're going to want to do that, John. If anything, what they would do is they would take one of those accounts and you could ask for an account review for the purpose of increasing your credit line on the one that you want to keep and then just close the other one. Or you could go ahead and close it and then ask for that credit line increase. Why is it that you need the increase simultaneously with closing the other one? Well, it's just the total available credit.

I mean, I know it affects the score and the, you know, that's all. Yeah, no, that makes sense. Are you carrying balances on any of your cards or is it just monthly spending and then you pay it off? No, no. I pay every balance in full twice a month.

Okay, yeah. So that's not even an issue for you, credit utilization, because your utilization is so low. And even for somebody who's charging up, you know, all their bills on their credit card and then paying it by the due date with that balance being reported, even if that trips above the 30% utilization, that's not even a factor for you because you're paying it twice a month.

So by the time it reports at the end of the cycle, you probably have a pretty low balance. So I can't imagine that you closing one of those cards or both is really going to have any impact because your credit utilization is so low. So if it were me, I would look at which cards do I actually need? You know, I mean, typically I would say for most people, they only need one card, maybe a card plus a debit card.

If you had a third card, maybe it's only because you have one you use for business purposes or something. Now, you may have a reason to have more than that, but I would, if it were me, I would systematically close these accounts. I wouldn't worry about the amount of available credit. And, you know, it really isn't going to hurt you because as long as you keep some of those older accounts around, which plays into your credit history, which is 15% of your score, credit utilization, which is 30%, is not a factor here. So I think getting those off the books, getting rid of any potential, you know, annual fees, but more than that, just the ability for those accounts to be compromised so long as they're open makes a lot of sense to me. Yes, yes, yes. And, you know, one way or the other, I know I've got too many cards and I want to cut that down.

My credit score is probably over 800 and, you know, I'm not fixing to do any big borrowing either. Okay. So this is really a non-issue for you.

I'd close them right away. Yeah, yeah. Yeah.

The exposure is still there. Yes, sir. That's right. All right. Thank you, John. Appreciate you calling. Absolutely, sir. Let's head to Chattanooga. Hi, Gavin. Go ahead.

Hey, yes. So I have four credit lines open. However, two of them I don't use because I didn't realize at the time, I was a lot younger, that they were credit lines I was opening. I got an email from one of the companies basically saying that that credit line is going to be closed within the next month or two if I don't go ahead and use the card.

I am fine with it being closed. I never used the card in the first place. I was wondering if this would negatively affect my credit any more than me just going and canceling the card. Yeah.

No. If the issuer closes your credit card account for non-use, it won't lower your score any more than if you were to do it yourself and you'd have the same implications, which is a potential adjustment in your credit utilization. And if that's one of your older accounts and that one comes out of the mix, that could affect you. But the fact that they're doing it for non-use versus you doing it has no bearing on it. Now, you may want to go ahead and close it yourself if you don't plan to utilize it just to be sure it's done properly. And then I would follow up on it to make sure it is, in fact, closed. But there's no difference between you doing it or them. OK, perfect.

I mean, I think that answers my question. Excellent. Thanks for your call, Gavin. We appreciate it.

800-525-7000 to Wisconsin. Hi, Marcy. Go ahead.

Hi, Rob West. Thank you for taking my call. Yes, ma'am. Happy to. You're welcome.

Yeah, sure. So I'm calling today. My husband and I have a mortgage that we took out in the year 2000.

It's been on an arm. We have never refinanced for a couple of different reasons, but the percentage rate is currently 6.25 percent, so we're paying about 14, say about $1,400 a month. That does not include home insurance. But we just got, you know, every six months, how the arm changes, the percentage rate changes. So we just got a letter.

It's going up to 8.175. So we owe about $61,600, and we believe that if we continue making payments an additional $100 a month, that we can pay it off in three and a half years. However, we also have in 2004, we had what I believe was called a line of credit. It was a $30,000 line of credit.

We suspended that, and it matured in 2014. We paid it, but, of course, we were probably just paying the minimum interest. And now we have not paid it faithfully.

We paid it on and off. And so the bank, obviously, it's not on our credit report, but if we try to refinance, we're not sure if we can. But our banker friend is telling us we should refinance our current mortgage and get it on a specific rate lower than 8.175% and then add this line of credit to it. It's about, say, $30,000. They might get it down to $21,000. So take out a mortgage for that, whatever, 10 to 15 years lower rate. And my husband and I are not sure about doing that. If we can pay off the mortgage in three and a half years. Yeah.

Well, yeah, no, I appreciate that, Marcy. And I think the biggest thing right now is you've got to get that line of credit current. I wouldn't mess around with that. I mean, they could put in foreclosure proceedings if they wanted to.

Now, they may not, but I understand, I mean, it's just a risk. I think with regard to the refi, it's just a math equation because what we have to look at is what is the cost to refinance, which could be, you know, 3, 4, 5% of the mortgage value. So if we're talking, I think you said you owed $61,000 plus another $30,000 on the second, so $90,000.

So that could be $5,000. And the question is, how much are you going to save in those three years? So we need to get the mortgage company to run a schedule to tell you exactly whether you come out ahead. Stay on the line. We'll talk a bit more off the air. We'll be right back. I'm so glad you're with us today on Faith and Finance Live.

I'm Rob West. Here in this final segment, before we head back to our final phone calls of the day, Bob Doll joins us each Monday. Bob is chief executive officer at Crossmark Global Investments, where investments and values intersect. And Bob, a lot going on in your deliberations this week, starting with inflation. I know we talk about that a lot, but a new reading out on PCE.

What is that and how should we think about that moving forward? The PCE, Rob, and the core, meaning excluding food and energy year over year, is the Fed's favorite inflation indicator. And it is versus a year ago, up 2.8%.

Not much different from the CPI. And of course, that's not two. It's down from where it was not too many months and years ago, but it's nowhere near two. So down from the highs, but not in the target zone for the Fed. So that means inflation is sticky, stubborn, whatever word you want to use. Right.

No question about it. And obviously, a lot of folks hearing that saying, wait a minute, you know, I'm looking at what's going on with my car insurance premiums. I mean, my house is up 47% since 2020. Doesn't mean that certain pockets of the economy haven't been up dramatically. But I guess the general trend is things are coming down, but we certainly haven't gotten to that level that everybody's looking for. Is that right?

That's exactly right. I mean, prices might be up 2.8% versus a year ago, but versus three, four, five years ago, they're up a lot more than that. And that sticker stock is still weighing on consumers.

Yeah. Bob, could you get used to a 2.8%? And then beyond that, what about the markets and the implications of that longer term? Yeah, if we knew inflation was going to be 2.8%, I think most of us could live with that, Rob.

The problem is it bounces all over the place. And if it's going to be 2.8, what does that mean? We have to be at 4.8 on occasion. I think three is tolerable, but the adjustment to the financial markets would be to the downward move if they were convinced, that is the markets convinced that it's three and not two. So the difference between two and three doesn't sound like a whole lot, but for interest rates in the bond market and for price earnings ratios in the stock market, two and three are very different from one another.

Yeah, no doubt about it. All right, Bob, another just interesting note here in your deliberations this week had to do with global equity returns. So think stock market performance here in the coming decade. You had some interesting remarks that I think have real implications for us as we think about our own portfolio. Share that with us.

Sure. A lot of people look in the rearview mirror and say, you know, over the last 20 years, my portfolio is up whatever the number is. Let's say it's 12% per year, which is not uncommon. Our point is going forward, the next 10 to 20 years, more like half that, Rob. There are only two ways to get stocks up, stronger earnings or higher valuations. And we know valuations are pretty full, but we probably also know that corporate profit, profit margins are pretty elevated. So absent the ability to get either of those much higher, it just means more pedestrian returns. Does it also mean, Bob, that with us living longer and with inflation, does it mean that the average investor, and we're just talking generally here, needs to think about being a bit more aggressive than maybe they have been in the past during this retirement season of life?

Probably so, Rob. I mean, look, if someone retires at age 65, they've got a life expectancy that's still another, call it 20 years. And stocks beat bonds over 20-year periods virtually all the time. So you're absolutely right. The difference between a return of five or six and inflation, let's use that number three, is still a positive number.

And the only way I'm going to get there is take on a little bit more risk in my portfolio. All right. Very good. Bob, let's finish today with China. Obviously, they're in the midst of an economic slowdown.

What's the latest there? And, you know, we just obviously are looking forward and thinking about under a potential Trump presidency. What does that mean for tariffs and even a potential trade war? How are you thinking about China just as someone who's responsible for billions of dollars? You know, with great difficulty, China and the U.S. don't get along in lots of ways, as you know.

One of them is trade. We've seen even in recent weeks the two leading presidential candidates, Trump and Biden, kind of tripping over themselves to see who can be the most hawkish in terms of tariffs on Chinese goods. And, you know, a tariff is a tax and it means higher prices. It means higher inflation. It means more difficulty doing trade. So we need to keep our wits about us, that is both countries, and try to find ways to work together.

Otherwise, the trade war that's already on, the Cold War that's already on, just continues to worsen. Interesting. All right, Bob, we appreciate it. As always, sir, hope you have a great week. You the same, my friend. All right.

That's Bob Doll. He's chief investment officer at Crossmark Global Investments. By the way, if you want to sign up for his weekly market commentary called Doll's Deliberations, you can do that at CrossmarkGlobal.com. Let's round out the broadcast today. Heading back to the phones.

Cleveland, Ohio, Summer, thanks for calling. Go ahead. Oh, hi. Hi. Thanks for taking my call. Sure.

I just have a question to see a guidance from you. I had a car accident. My car got totaled. It was an older car and it depreciated so much because it was just, I got financed at a high interest rate because I already had another vehicle in my name. But however, the insurance company only paid the car what they thought it was worth. But I'm still going to end up owe $4800 because of my high interest rate because I still got like eight more months to pay for the car. It's not even that big of a nice car. I mean, and I live like three paychecks.

I don't live paycheck to paycheck, but I live like two paychecks or two paychecks. Sure. I don't need to know. I don't know.

I need to know what guidance I can do. And I talked to the finance company, but they're not going to settle. They want me to just make my monthly payments for eight more months. That's a car note. I want a car insurance because I suspended off the car because I don't have it anymore. Yeah.

No, I understand, Summer. I'm so sorry to hear about that. I know that's really challenging. You know, it is possible to work out a settlement with a lender, but they have very little incentive to do that. What I would do is engage them, be prepared to show your finances and make the case that, you know, you're really, it is a struggle, assuming that's the case, to be able to make these payments. And if it was forgiven, be prepared that you could get a 1099 for that and the IRS would consider it income. But what's more likely to happen is they're just going to lean on the fact that, you know, they've got you agreeing to this loan and the full value of what you owed, whether or not the car is available to satisfy that or not. And they're going to make you pay that payment for the length of the loan. And if you don't, then they're going to, you know, put a black mark on your credit and they could even come after you beyond that. Obviously, they can't repossess the car any longer, but they could try to seek a judgment against you. So I think is never a bad thing about leaning into that conversation and just letting them know the status of things, seeing if you can work out something, either a reduced payback or a settlement.

But, you know, it's not likely to occur. And so I think in the meantime, the question is, what could you do to boost your income? Perhaps cut back expenses and find a way that you could pick up something that's reliable and transportation to get you to work and so forth while you still have this other obligation that you're now going to be covering. And I know it's not ideal, but we'll ask the Lord to give you some wisdom as you navigate this. We appreciate your call, though. Let's go to Tampa, Florida.

Hi, Tina. How can I help? Yeah, we have a current trust fund and our daughters are both of age now. So do I need to update that trust fund and remove my niece as the executor? Because I don't think we need her now that both my kids are over 21.

Yeah, yeah, I could be. You just need to decide who you want that executor to be. And if you decided you wanted to make a change there, then absolutely a quick update to that would be in order. And so I would just reach out to the attorney that put it in place. I assume you still want to keep the trust in force.

Is that right? I'm not sure whether I do need the trust now or should I just switch to a normal will? Yeah, I mean, the benefit is you've already spent the money to have it drafted. I assume you've already retitled things in the name of the trust. So there are some benefits to it. I mean, one is if in fact you and or your husband was incapacitated, then the trustee could step in and manage the assets of the trust prior to death. It's going to handle the efficient transfer of the trust assets at death without involving probate.

So that means you're avoiding the time involved in the probate process as well as the expense, which is not insignificant. So I think now that you've got it, it's probably worth hanging on to. You've done the hard work. You've paid for it. I think it's just a matter of getting it updated so that the trustee is accurate.

Thank you so much. I have one other question. Do you have time for it? Real quick, go ahead. Yes. So if I have a couple 401s that aren't in the trust and my kids are the beneficiaries of the 401s, they don't need to be added to the trust, do they? No, absolutely not. Because you have beneficiaries on them, is that right?

Yes, sir. Okay, yeah. Retirement plans cannot be transferred into a trust. So they would have to be distributed from the plan first. If they were to be able to, you know, for the money to go into the trust, but the plans themselves actually technically can't even go into the trust. So you would just want to make sure that you have those beneficiaries up to date and you should be all set.

That's exactly what I want to know. Thank you so much. You're welcome, Tina.

May the Lord bless you. Thanks for your call today. Hey, folks, before we round out the broadcast today, first, thanks for listening and being a part of the program. Second, this is a really important time for us here at Faithfi.

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