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August 18, 2020 8:03 am
From our believe it or not, files, the word is that Russia is catching flack for testing virtual reality headsets and cows. Experts say they're really milking the technology.
But one thing we know for sure. Virtual reality has entered the world of credit card transactions. Today, Kingdome advisers president Rob West tells you how it might affect your purchases and add to your calls on anything financial at eight five to five seven thousand eight hundred five to five 7000. I'm Steve Moore. The pros and cons of virtual credit cards next right here on Money Wisely.
And Rob, I don't think I'm alone in saying that I have never heard of virtual credit cards.
So what exactly are they saying? Well, as you might expect, Steve, they're not actual credit cards made of plastic. They're a free service now offered by some of the major issuers like Capital One and Citi. And they conceal your financial information and keep it safe while you buy things online. Basically, it's a temporary, randomly generated number that's different from the one on your real credit card. So if hackers hijack your online transaction, the virtual number won't do them any good. So it's an added layer of protection, you might say.
Very interesting. OK. So how do these virtual credit cards actually work then?
Yeah, well, when you sign up for the service, you don't have to use your real credit card to purchase or your credit card number, I should say, to purchase things online. It works in different ways, depending on the options provided by the card issuer. For example, you might use a disposable virtual number for a single purchase. This ensures the safety of the transaction, especially if it's with a Web site or company that you don't fully trust. The issuer will generate a random 16 digit number to use for the purchase, and that number expires when the transaction is complete. You also have a single merchant option. The card issuer will allow you to set up a virtual credit card number for a specific merchant that you can use over and over again. That would be a time saver if you frequently buy a lot of things from an online source that's consistent, perhaps Amazon or something else.
Right. OK. Well, those are the pros for virtual credit cards. There probably are some cons right now, Steve.
The biggest downside is that not all cards have this service, but that will probably change as more and more issuers realize it protects their interests, too. Now, if the services available with your card, you still have to go through the setup process to get the virtual number. And if you go with the one time use option, you have to go through that process every time you make a purchase. So there's a bit of an inconvenience factor, but that's a lot less than coping with identity theft for sure.
Yeah, yeah. OK, well, if I want to give this a try. Where do I get a virtual credit card?
Well, the first place to check is with your card issuer. They may offer the virtual number on the card you hold or you may have to ditch that card for another one. We know that Capital One and Citi both have some form of the service. Capital Ones is a virtual assistant called Eino, available for most of its cards. It lets you create and manage virtual credit card numbers for various merchants. Meanwhile, Citi has the appropriately named virtual account numbers. It generates random numbers for each transaction you make, all the while protecting your actual credit card number. But again, the service isn't available for all of city's credit cards at this point.
At this point. All right. And that's the thing now that we know that we have people all excited or at some people excited about using a virtual credit card number, they may not be able to get one any other option out there.
As a matter of fact, there is at privacy dot com, you can sign up for a virtual debit card for use over and over again with a particular vendor. And you can create what are essentially burner debit cards that you use only one time.
Okay, I'm sensing that there are probably some costs involved in producing something like this. Who gets charged, Nick?
Well, with that, actually, no cost. It's free to individuals. The company makes its money by taking a small percentage of the merchant fee for processing the transaction.
OK. It occurs to me that all credit card and most debit card issuers won't hold you liable for fraudulent purchases purchases these days. So do I really need something like this?
Yeah, well, you can definitely have more peace of mind by using a virtual credit card. And while it might be a bit of a hassle getting it set up, having your actual credit card number stolen would probably be a much greater inconvenience. So, again, it's cost benefit. You have to make that analysis and determination as to whether or not it's something that you want to pursue. But here's the bottom line.
In the same way, the scammers are getting more sophisticated all the time. So harder the credit card companies themselves doing their best to help us stay safe.
And more than likely, unfortunately, there are scammers already trying to defeat this system.
I have no idea how they do it, but I'm not a scammer. So let's take some calls, take a break, then we'll take some calls. Eight hundred five to five. Seven thousand.
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This is Max McClaine. If you are already righteous, then you don't need Jesus, right? Listen to the Bible from Matthew nine.
While Jesus was having dinner at Matthew's house, many tax collectors and sinners came and aid with him and his disciples. When the Pharisees saw this, they asked his disciples, Why does your teacher eat with tax collectors and sinners on hearing this? Jesus said It is not the healthy who need a doctor, but the sick. But go and learn what this means.
I desire mercy, not sacrifice. For I have not come to call the righteous but sinners from Matthew nine. Listen to the Bible.
It's great for the soul to be able to hear the word of God today and every day. Hear more at Radio Bible talk. That's Radio Bible talk.
If the heavy burden of debt is robbing you of freedom and peace of mind, Christian credit counselors can help. We're a nationwide nonprofit credit counseling organization that has helped over 300000 individuals in the last 27 years get out of credit card debt 80 percent faster while honoring that debt in full. To learn how Christian credit counselors can help you. Visit Christian Credit Counselors dot org. That's Christian credit counselors dot org. Or call 800 five five seven one nine eight five.
Pleased as punch to have you with us today moneywise live. That guy over there, he's Rob West.
I'm Steve Moore and we're taking your phone calls today.
Your questions, your comments, your thoughts on anything financial when you dial 800 five to five seven thousand, Rob. We were talking about virtual reality credit cards, but we led that topic with a story from the BBC about the Russians being castigated or at least having their hands slapped for trying out virtual reality headphones on cows. Would you like to weigh in on that sign? No, I think I'm in a pass on that, unless you would, sir. No, I think that's utter foolishness. So there's no sense in going there. I see what I did there. You know, I really was the beebee. It really was a BBC story there. And what was the point of it? Well, it was virtual reality headphones. And in the story, there was actually a picture of a cow, a guernsey with these giant headphones on. And I would imagine it has something to do with getting a cow to give even more milk. You know, relaxation techniques or something like that. Sure. It's less stress. Got it. If you give them a stress ball, but they have trouble holding them in their paws or. What does a cow have then? A paws claws. No home. It is some kind of hoof. Yeah. Okay. Well, now we've gone down that road. Eight hundred five to five. Seven thousand Cedar Lake, Indiana. Hey, Roger, how can we help you, sir?
Hello. How are you?
Great, thanks. Go.
OK. I have a question over. Look at these. He locks in first leave position, just home equity lines of credit. I've been studying those for a couple of years and and I've played with one in the Second-line position. And I'm pretty convinced they work. I watched it work and it's a whole lot cheaper than a mortgage. And I just wonder why I never hear anything about it, like on your show. I'm like, I must be missing something because I never hear you promote them or talk about them.
And so rajar other. I'm sorry. Go ahead and finish.
I say when I talk to people about them, all I get is fear. And this is a scam. And I've studied them enough. And like I say, I did one on it. Secondly, position. And I don't see the scam in it at all. I know the a lot of companies out there sell you the strategy. They want to sell you the strategy that it's, you know, the strategy, you know, whatever. You don't need that. But I'm just like, why are we so afraid of these? Am I missing something?
Well, let me just make sure I understand what you're using the helike for. So are you talking about this strategy where you use a helike to try to pay off your first mortgage, or are you talking about taking it out instead of a first mortgage for renovations?
What is the purpose for the helike in the situation you've been exploring?
OK. Basically, you replace your mortgage with the helike and all it turns into is a big checking account so you don't have money sitting in a checking account doing nothing. You can just put all your paycheck or whatever in the Heela and at the end of the month, you write your bills out of your Heela and you just use it that way. Right.
Right. Yeah. You know, I don't think it's a scam.
I certainly wouldn't be one to call it that. This is a strategy that's been out there, you know, on the Internet. Folks have been talking about it for some time. You can find all kinds of YouTube videos explaining it. And the concept behind it can work because of the way the interest is calculated daily with a home equity line of credit. Therefore, any given day where the balance has been reduced because you have your income paying against debt and then you draw it back out and in some situations they'll tie in a credit card with it where you use the credit card for your expenses and you balance between your income and the lock in the credit card. And you're using your income as a vehicle to pay this balance down, thereby paying less interest over time. I think where the challenge comes in, Roger, is it takes a bit of coordination. It is a bit complex. It's not just simple, like the average person who's got a conventional mortgage. They're trying to keep their lifestyle low. They're trying to create margin, maybe sending a little extra to the mortgage payment every month. And they're not having to kind of manage this cash flow. And this he lock if there's a disruption in income, it can be challenging. You lost a job. Your hours are reduced.
You've obviously got a variable rate attached to it. If that moves against you, that could create some challenges. But I realize even if you think through all of those and you're willing to accept all of that on paper, it can make a lot of sense. And again, I don't think there's anything associated with it that's a scam. The reason I would probably encourage the average person to stay away from it is just the complexity, the regular cash flow that you have to have. The fact that you've got this variable rate tied into it. And if you don't have a healthy income or you have a disruption in income, there can be some challenges also at any given time. They can close the line and they have the right to do that. You know, any available amount could be dialed back. If you read the fine print on these home equity lines of credit, or they could automatically just shut it off and convert it to a term payback at that point. So you have to know that that risk is out there as well. So, you know, if this is something you're willing to stay on top of, you've done your homework. You understand the implications.
You're willing to put in the time and energy to manage it, and you feel like there's not the potential for a disruption in income that could create some complexities. Again, I don't think it's a scam. I just think that for the average person, it's a bit more that I would encourage them to do. I like to keep things somewhat simple.
And I disagree with you on certain points of that. I find I find that it is not always variable interest. You can lock in on him. And I actually like the protection it gave me. If something did happen to you, all you were responsible for was the interest. It's just the interest only, you know, Heela. Right. And I thought that was that was a positive thing. And I don't think it's as complicated as it first looks. You have to look at money different. And my question really is, I mean, I understand exactly what you're talking about. We're talking about the same thing. My question is, and I think you answered it. You think most people it's too complicated forum. But in reality, you may be right. But I look at it as you pay a third of the interest.
But again, I'll just say, if you had a you know, and that's a huge savings, especially for Christians who are trying to support churches or missions or whatever, it's like, man, why are you talking about this immunity? And that was my question. Why? Yeah, I haven't heard you tell anybody to look at that. Sure.
And it's for those reasons. So I would say a couple of things. Number one, if you have any particular articles that have been particularly helpful for you and understanding and unpacking this concept, I'm always open to learning more. So shoot those over questions of money wise, dawg, and I will commit to you to read it. Secondly, I'll ask our team to put together an opening topic on it where we do a deeper dove into this concept.
And then thirdly, I think at the end of the day, the reason you don't hear us pushing it or talking about it more is, again, for the average person, they're looking to keep things simple. And I think there are some risks that if you don't go into it with your eyes wide open, you don't understand what you need to do to make this all work for you that it can, for the wrong person, not be an effective strategy.
And so that's why, you know, when I'm talking to large audience, I wouldn't be an advocate of this strategy.
But at the end of the day, if you can save money and you want to use that to be a good steward and to be more generous, I have no problem with that. And again, I don't think this is a scam by any means.
Roger, we appreciate your phone call. So thank you very much. And by the way, a while we don't push this concept. We do talk about it quite often. In fact, we had a call about this yesterday. So the topic does come up from time to time. But, yeah, you're right. We've never encouraged it before for people who have a hard time just making their mortgage payment time. Sometimes it can get a bit complex. But again, we hear your thoughts and we appreciate those. Thanks very much, Mentor Ohio. Hi, Stephanie. What's up? How can we help?
Hi, thanks for taking my call. My question is relative to the virtual credit card. I was wondering how returns would be handled. Let's say you purchased something online. Right now, if I use my regular credit card, I send it back. They credit that card if this virtual number expires. How would the return work?
Yeah, that's a great question, Stephanie. Credit experts say that trying to return an item purchased with a one time only virtual credit card can be a headache. And it is one of the stumbling blocks to more people using them. They recommend keeping all your electronic receipts, confirmation numbers, any other documentation with a one time purchase and even then using one. Only if you're confident you won't be returning the item. So you could just skip it for those purchases where you would think you may have a potential return on your hands. They say a repeating virtual credit card makes the return process much easier, meaning one per vendor, because the number will still be working. And at the end of the day, the number will always be able to be tied back to your particular account. But given that it if it's a true one time use, given the fact that it's going to be used and then go away, it can create a headache. So I think you either need to go with the merchant only option where that number is still good, but it's just for that particular merchant or limit one time use virtual credit card numbers in use for items where you're really confident you're not going to be making a return.
But more than likely, Stephanie, as this gets sorted out, well, it'll get sorted out. Those areas of concern or problematic areas will be dealt with. But a great question. Thank you very much. You're listening to Moneywise Live. Eight hundred five to five 7000. If you have a question for Rob West, now's a great time to get in. Eight hundred. Five to five. Seven thousand.
Many people adopt an attitude toward marriage and finances that it'll all work out somehow. But sadly, it often doesn't. Financial woes can devastate a marriage, but there is a better way. God's way. Money and marriage. God's Way by Howard Dayton will help you discover God's approach to growing your finances, strengthening your relationship with your mate and cultivating godly joy. Money in marriage. God's way is available when you click the store button at Moneywise Live, Dawg.
Peoples sports, Wolf says, for the word of God is quick and powerful and sharper than any two edged sword. Here's Beth Moore with a quick word first.
Thirty eight says this four. I am convinced that neither death nor life, neither angels nor demons, neither the present nor the future, nor any powers, neither height nor depth nor anything else. Paul, this leaves it there in case I've forgotten anything. There's anything else in all creation we'll be able to separate us from the love of God that is in Christ Jesus, our Lord. I want you to jot down point number four, is this for I am convinced. Remember when we studied Romans eight twenty eight together? We said four. We know. Do you remember that lesson? Cause we really got into it together. It's sometimes it's gotta be a way because sometimes I'm going to forget and I got to have your part A we say let me listen. I just can't wait to see how God can work this out. But sometimes there just comes a place where is are and where this ends now is. Are you convinced? Because here's what occurs to me as we look at all these.
Watts and the watts are not enough. We got a who. That's demoralizing us through the wise googol is psychological warfare. All this physical warfare. And I mean just we're in a fit. And it occurs to me that when there is a time of suffering, nothing makes you feel more isolated. Physical pain, very isolating, mental pain, emotional, but very isolating. There are some things that are better now.
You've been listening to Beth more with today's quick word. Maybe you're like me. Always on the go. The free living proof app is a perfect tool to help you stay connected. Encouraged. And it is worth.
Download the free app today. Just search for Beth more in the App Store.
Do you know if you have enough enough money out of house? Do you know how much is enough?
If not, Ron Blue can help with his book. Master Your Money, a step by step plan for experiencing financial contentment.
Learn how to save, invest and give wisely how to create a long term financial plan and how to get out of debt. You'll find it all in Master Your Money by Ron Blue. Available when you click the store button. Money wise. Live Dork.
Hey, if you'd like to find us on line, we have a Web site you might enjoy perusing. It's called Money Wise Lived or gee, money wise, live dot.
Oh, well, gee, a lot of great information about who we are, what we do, some resources that are yours absolutely free. That'll help you with personal budgeting, things like that. And it's also where you can find a certified Kingdome adviser in your area in a number of different disciplines. Also, an easy and quick way to find a budget coach that will help you online with a quick phone call. So, again, check it out today. It's money wise, live dot org. Oh, and one last thing. One very important thing. If you click near the top of the page, you'll see a box there that says be a partner or be a supporter of what we do. And if you enjoyed the program, if you find it helpful and you'd like to be a part of what we do, a part of our ministry financially. Just click on that little box there in the top right hand corner and we thank you in advance. Indianapolis. Hello, Duke. We understand you're in the car. Be safe. And how can we help you?
Well, I was in the car and I had the chance to park, and so I walked inside and stayed on the line. But thanks for being considered about that. And so, anyway, I've got my hands free so I can make some notes here. Here's here's my question. I am retired and my wife was working until last week and she was downsized last week. And so with her loss of job, what comes the loss of our benefits?
And we were both counting on her for her benefits. She was receiving from her job. I mentioned I'm retired. I'm sixty four years old, so I don't qualify for Medicare yet.
And she is 61. So she doesn't qualify for Medicare or Social Security yet. Someone. And what's our next step? What's the best next step financially? Yeah. Get some benefits.
Sure do. Well, you know, you're within a couple of years of being eligible for Medicare, obviously, and a Medicare Advantage plan. And when you have Medicare along with that supplement, it'll be probably the best insurance you've had where you can really go to any doctor and have whatever you need taken care of in the meantime. I would check out Christian Healthcare Ministries for a great alternative to health insurance at a very reasonable cost. It's not insurance, but it will allow you to cover the cost of health care. As Christians share one another's medical bills, are you familiar with those health care alternatives?
I have heard of it several times because I listened to your show frequently. And so I've heard the promotional announcements, but I've not investigated it and I have intended to investigate it since. I have intended to investigate it since you lost your job. So tell me more about where to start with looking into that.
Yes, sir. Well, the great place to go would just be the Web site. Christian Healthcare Ministries. It's C.H. Ministries, dot org, C.H. Ministries, dot org. You can read all about it. But essentially, you know, on their gold plan, you would have you'd be self pay. And after five hundred dollars per incident, you know, the other Christians in the program and through their own sharing back would cover 100 percent of each incident. So you would pay up to that. The great part about being self pay in terms of your relationship with your health care provider is you can negotiate discounts and so forth. But because it's such an affordable option, it really just is so compelling alongside the traditional insurance options. And it's a biblical approach. We've got some team members here on the moneywise media team that have used it for years and years and absolutely love it. So I think for somebody like you and your wife, Duke, where you're trying to fill this gap of time between now and when you're eligible for Medicare, this could be a great resource for you. And because of the the real affordability of it, because it's so budget friendly, you could take the difference between this and what you'd pay if you went out and got traditional insurance. Sock it away to really cover, you know, the first amount of each of these incidents before this kicks in. And then couple of years go by, you'll be able to jump into Medicare and have all the coverage you need. So S.H. Ministries dot org is the place to go to learn more. And after you look at it, give them a call. They'd be happy to explain anything that doesn't make sense.
Duke, we appreciate you getting through today and trying and for pulling over. And we hope that you and your wife find something that really works for you. Again, thanks very much for your call now. We're going to have to take another brief break. When we come back, we'll speak with Irene in Chicago, wants to know about her retirement money and using Cleveland, trying to help a friend who is trying to get out of a car lease.
And that can be easier said than done. Roots in West Palm Beach wants to know about the page program for home renovations. That and much more after we return. This is money wise. Live with Rob West. We'll be right back.
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Thank you from the bottom of my heart. I couldn't have had the procedure I needed without S.H., HMS help sharing the bills. That letter from a member display's Christian Healthcare Ministries purpose to glorify God and serve his people. CHF is the original non insurance voluntary health cost sharing ministry, enabling its members to share the cost of each other's medical bills. Call 807 nine 160 225 or visit S.H. Ministries dot org.
Hi, I'm Chris Babri. The moody radio version of the week is found in Second Corinthians one, three and four.
Praise be to the godfather of our Lord Jesus Christ, the father of compassion and the God of all comfort who comforts us in all our troubles so that we can comfort those in any trouble with the comfort we ourselves receive from God. At Second Corinthians one, three and four, the moody radio verse of the week.
We all long for something good. True and secure. There's a hunger for a hope that goes beyond politics and entertainment and reaches deep into our souls. That hunger can only be satisfied by Jesus for more than 90 years. Moody Radio has faithfully delivered that message of. So they can take the next step in their walk with Christ.
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God cares a great deal more about our money than most of us imagine. In fact, Jesus says more about our use of money and possessions and about anything else, including both heaven and hell, in managing God's money. Author Randy Alcorn breaks it all down in a simple, easy to follow format that makes it the perfect reference tool. If you're interested in gaining a solid biblical understanding of money, possessions and eternity, managing God's money is available when you click the store button at Moneywise Live Dot or.
Well, that's our news.
I'm John Scott. President Trump has been traveling today. He visited storm damage Iowa, where federal assistance is underway after last week's severe wind damage and was also in Yuma, Arizona, to get an update on border wall construction. California power grid operators keeping a wary eye on the thermometer today as an ongoing heat wave continues to stress the electrical system. A national coin shortage has been an unusual side effect of the pandemic. The Federal Reserve announcing in June that the supply system of coins has been severely disrupted. While there are still enough coins out there, they aren't circulating as freely because many businesses have been closed. On Wall Street, the S&P 500 closing at a record high today, racing the steep losses after the coronavirus forced widespread shutdowns. The S&P gained seven points today to close at three thousand three eighty nine. The Dow was down 66. This is SRN News.
Every day someone is facing the issues of debt insurance, giving, housing, credit saving. Getting good financial advice.
What does the Bible say about money and your faith in your trust and eternity? Well, the Bible addresses all these issues. And if we can help you with these issues and more, this would be a great time to call. We actually have some open lines and that means you can get in line at 800 five to five. Seven thousand eight hundred five to five. 7000. Now we go to Cleveland, Ohio. Hello, Andrew. What's on your mind?
Yes, Paul, I'm sorry. I. I think fitting call you a lovely guy. I love you. Ever you. You. I haven't.
Yeah, I have a friend who Holyfield bought me next month and he was looking at purchasing another vehicle or either releasing another car about kind of out doing that so she can get at least five more. Why would you tell her to out or leave? And she's looking into it and I don't even know.
That's a good idea. I think the old I think the buyout is like twenty two thousand bucks. You have to agitational like twenty four thousand. And he's been paying on it for three years. But now you want to do like the TV here. They can give us like five, seven or forty or credit union people, five seven natsu, GMAC and those would be but they won't do it at 16 months. And I still going to be about 430 on my manif. Eight European on a car. Yeah, a lot. But I mean, I've been warned they'll be better longwalls, those you can get out of there after five years. The only good policy is a new 2017 Buick Hall and Chiloquin. Not because I think so. I don't see any of it. I mean. Right. License.
Yeah. You know, I would encourage her to avoid a lease in the future. Now, the buyout option at the end of a car lease, you know, it can go both ways. The buyout price is set by the leasing company at the beginning of the contract. So generally, if you're anticipating extra fees and penalties, you know, buying the car can cut your losses or if the market conditions have changed since you signed the lease, the car's in good condition. There could be some hidden value in there. Typically, the times you'd want to potentially buy it out or when you're way over or under the allowed mileage, if you have excess wear and tear and therefore you're gonna be charged for it if you can negotiate a lower buyout price, which is possible, because keep in mind, when they get it back, they're going to have to, you know, pay the auction fees and the shipping and the other things that come with it. So in some cases, you could talk to the leasing manager at the leasing company and see if you could get an approved lower price. If somebody wants to buy the car, you know, and you want to you're able to get out of it and and basically pass it on that way by selling it and covering the cost, or you just don't want the hassle of shopping for a new car.
But generally speaking, I think if she just continues to pay it out, turn it in.
Be saving, which means she's got to live on a budget, creates a margin and some savings to buy a good quality, highly rated two or three year old low mileage car that's been checked out by a reputable mechanic. And then she can just drive it till the wheels fall off. That's going to be the most cost effective way to go. And with most situations, unless you're in one of those or she is in one of those situations I just described, just paying it outright until it's over and then turning it back in. Is June generally going to be the best option, Steve?
Anything you damn well know. I think she didn't make a great decision several years ago. That's water over the dam. Andrew, you sound like a good friend. And I think your recommendations and the things that Rob just mentioned are pretty much covered. What she can't do is just give the car back. Some people think, well, I'll just give the car back and call it a day. Well, legally, you can't do that. The dealership won't let you do that. It would totally destroy your credit. So there aren't a lot of great options. The Buick Lacrosse has been a reasonably good car. So if she's willing to drive it out until the end and maybe even increase the payments just to get out from under, that might be the best thing. But I'm glad that you're there at her side to help her through this. And hopefully she won't make this this area again. But we appreciate your call today. Thank you very much. Chicago, Illinois. Irene, what's your question for Rob West?
Hi, Irene. Are you there?
I think Irene may have put us on hold, we'll come back. West Palm Beach. Ruth? Are you there? Ruth, are you with us?
I think we're having just a bit of technical challenges, Dave, here, which is no problem. You know, let's go back for a second and talk about cars and leases. You know, so often folks will think, especially in this day and age where we're so focused on monthly payments, they think, why wouldn't I do that? You know, why wouldn't I just have that monthly payment I can count on? Have that new car all the time. And what you don't realize is that in so many cases, you're putting yourself in a position where you are paying for the most expensive years of a car's ownership. And that is where it's depreciating the quickest. Right. Which is why so often will encourage folks to buy that two or three year old cars, because they're missing out on that rapid decline in the value of the car buying in after it's lost a lot of that and then owning it over time where you get out from under any kind of car note or preferably pay cash, and then you're not in this payment cycle of constantly trying to finance a new car during the most expensive years, not in terms of maintenance, but in terms of depreciation. Isn't that right?
No, totally. Totally. And right now, I mean, the car companies, the dealerships are doing all they can to make car leasing that much more attractive. So it's something you really don't be sold a car lease by your car lease or buy your car, meaning do your homework first. So you know exactly what you're doing. But again, we don't think car leases ever a great thing. Let's try Irene again in Chicago. Irene, you with us now?
I think we're still having some challenges with the phone system, they're working on it. I know we do have an e-mail here, though, that we could take and I've got one up here from somebody who says I want to refinance my home and vehicle by borrowing against my retirement funds. Will that count as taxable income on my taxes? Would be. Would this be worth doing? You know, we don't recommend borrowing. Robert, by the way, thank you for this e-mail. Borrowing against retirement funds, just not a good idea for a couple of reasons. Number one, it won't be taxable while you're borrowing against it. If you're four one, K allows you to do so. But if you separate from the company for any reason, they let you go. You decide to move on, then it will all be taxable at that point. It will be considered a distribution. And by the way, if you're not 59 and a half, it will be there will be a penalty on top of that. So so taking money against the retirement and using it certainly to pay off or refinance a home or a vehicle, just not a good idea. I'd leave that money there. Let it grow for its intended purpose. Because remember, when you borrow out of your retirement account, that money is no longer working for you. And so we want to keep that money there now. If you find the budget is not working, I would go back, look for other ways to cut. Look for other areas to trim, to create some more margin. And if you have to reduce either temporarily or permanently the amount you're putting into retirement, perhaps that's the better option. But we've got to go back to that spending plan. And by the way, Steve, speaking of spending plans, I was just talking to the team that manages and and helps with our money wise coaches. And they were saying we had a 30 day backlog.
We are now current because we've been onboarding so many more coaches. So we've got coaches available to help you out money wise live. Dawn just clicked connect with a coach. Mean coach.
Okay, listen, here's our phone number. If you'd like to get in line, we'll do our best to get you today. Eight hundred. Five to five. 7000. This is money wise live. And we'll be right back.
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They were back when he was alive. You'll have to pardon us. We've been having some phone issues here, but let's let's try.
Lynn in Chicago. Lynn, can you hear us?
Yes, I'm here. Hello.
Oh, great. Thank you. How can we help you with your question for Rob?
Quick question. We have several credit cards, and we we've always pay them off in full. So our credit rating is very high. But we have several store credit cards that are open while they're open, but we don't have any amount on them. And I'm wondering if it's better if we close them or do you think closing a credit card affects are high credit score?
Yeah, it's a great question, Lynn. And this comes up frequently because so many people have these store cards. They open them perhaps to get a discount. Didn't plan to use them, didn't. And now they're just sitting out there. And I actually like the idea of you closing up these unused cards because it's just one less account that you have to stay on top of one less account that could potentially be compromised and used fraudulently. So I like the idea of you closing it. Could it have a temporary negative impact on that high score? Sure. But it's probably not going to reduce it by more than 10 or 20 points and it's going to be temporary.
The whole reason is if, in fact, the credit scoring model that you would be looking at doesn't factor it into the history any longer, that could affect you.
The fact that that available credit comes off could raise your total utilization. Now, if you're paying most of your accounts off every month, that's probably not going to be a factor. But just closing it can often see or result in a temporary decline in that credit score. I wouldn't worry about that. I think the main thing is you want to manage your money wisely, be an on time payer and do what you need to do to safeguard your financial accounts. And I think closing this is certainly headed in that direction. And any kind of decline would, in fact, bounce back over time. And bottom line is, unless you're right on the border of a one tier or another and you're going out to, you know, open a new account or refinance your house and, you know, you need a 740 and you're at 745, and all a sudden you're at 720 and now you no longer qualify. I mean, that would be the kind of real life implications of this. But apart from that, it's really, you know, doesn't matter where this thing is on any 30 or 60 day period, I would go ahead and close the accounts otherwise. Does that make sense to you?
Yeah, definitely. That's actually my thought. And would I prefer to do it again? Sort of like that. I just don't like having that information out there.
Whether the cap account's being used or not is. Yeah. My husband says that they're going to affect our credit card. So our score.
I'll let him know. But yeah, I appreciate your answer and thanks. I listen almost every day on my way home from work. I'm regrade hollier. Do you have. Yeah.
Well, that's very sweet of you land. Thank you for calling. You be safe out there and we'll hope to talk to you again real soon, huh?
All right. Let's go down to West Palm Beach one more time and see if we can get Ruth on the line here. Ruth, are you with us?
Oh, hi. I'm so sorry we've had some phone line issues, but thank you for putting up with us today. How can we help you?
Oh, thank you. My first time calling in, but I left less than often, so I was informed about a pace program, which I did sign up.
But I'm within like three days to cancel it.
Yes, I wanted advice using this program because it will put a lean on my house. Yes, they gave me a good rate, which is three point nine percent for 30 years. And I could have more. I could afford the payment. Yes, because I refinanced some years ago and got a good rate. And payment is very manageable. Yeah, but I just I'm kind of leery about the link that's going to be placed on my house. I need a new roof is what I know. My roof is like 20 years old. Sure, sure. Shingles laugh and all that. Okay.
Yeah. You know, I don't have any major concerns about it.
I mean, the PACE program allows a property owner to finance the upfront cost of certain eligible improvements on a property, and then you pay it back over time through a voluntary assessment where it's unusual, which is what you're describing about it being attached to the property, is that it's not attached to the owner, which you would expect with a loan. It is actually attached to the property itself, which is that lean. You were describing there. Easy to qualify for.
It's 100 percent financing. And can you pay back as much as over, you know, 20 years? The downside is that it's they're often pushed by contractors who have a conflict of interest. They you know, the more you borrow, the more money they can make. Only certain projects are covered. And so you just need to make sure your project qualifies. The payments can be a burden. And, you know, they're typically only paid once or twice a year as an assessment. So some folks who aren't saving for them can be caught off guard on that. And the interest rates which are rolled into the assessment can be higher than what you'd get with a home equity loan. Now, if it's three and a half, that's obviously less than the typical helike today or even a home equity loan, which I would prefer.
So you just need to understand the implications of it. There is going to be a lien on the property. It's going to be in first place ahead of other creditors. And you need to save for those assessments. You need to understand the true cost of what you're paying for. Even though it's baked into the assessment. But at the end of the day, if it's the most cost effective way and your renovation qualifies, I don't have a real concern over it.
Ruth, does that pretty much answer it for you?
Yeah, just one thing, I don't pay my property taxes monthly. It's rolled into my escarole. So they said what would happen? And I called my mortgage company regarding it. And they said what would happen is that my monthly payment would be increased by that monthly amount that they quoted me.
Yes. And so it would go into escrow with the other periodic payments that against the house, is that right?
Yes. Yeah. Yeah. And does that fit into your budget?
Yes, it does.
OK, so that that would be the key there. I mean, the good news is it's going to happen monthly, so it's not going to catch you off guard is going to go right and ask. They'll make the payment for you. But just because you can afford the payment doesn't mean it's a good deal. So I'd still check. What are the costs?
What the interest rate that's baked into it and make sure that all of that makes sense versus other traditional lending options. If so and everything looks in order, then I think the way you're doing it through ESCOs escrow is a great idea.
Ruth, thank you very much. We appreciate your call today. Let's stay in Florida. And Rob, let's say hi to Rose. She has some retirement questions.
Very good, Rose. Thank you for calling today. How can we help?
Hi. Yes, I'm in the drop program with my employer, and this is my last year or before I retire next year, June, and I'm looking for some advice on how I should invest the money that I would be receiving upon retiring. I should get about two hundred thousand dollars from drop. I'm looking at not taking that money since it's pretax. And to get it, it will be taxed, you know, several times over. So I'm looking for the best advice on, you know, invest in that either through a an IRA Roth IRA.
I have a four or three B. And I'm trying to, you know, look at the best. Way to invest that, so. Sure.
Yeah, that makes sense. Rozo with the drop program and the Florida retirement system, obviously you're going to have this this money coming to you. You can roll it over into an eligible retirement plan like an IRA, which would defer the taxes. And I think the key is what you want to do with the money. Did you say that you don't intend to start drawing an income off of it immediately?
Right. Because I have a pension. And so I plan on just living off my pension and if necessary, Social Security. I'm not sure if I'll take that right away, but just, you know, looking to see how I can manage just with my pension. And I wanted to try to invest that amount or put it into something else temporarily until I need it.
Yeah. So a couple of thoughts. That's great. So I would really focus in on that retirement budget. Now, before you get to this place and really understand, what are your income sources, your pension and Social Security, when you take it, obviously, the longer you can delay Social Security all the way up to age 70, you're going to add eight percent a year to that check for the rest of your lives of your healthy. And you don't need the money that could really help you dial into the budget. Make sure you understand all of your expenses and get a plan for what income is needed. Obviously, if you can leave that drop money in an IRA, not draw anything out, then it'll just continue to grow. Now, this is a significant amount of money you've been building over a long period of time. So I would encourage heroes to hire an investment professional to manage this for you. You'd sit together, you'd talk about what God has for you in this next season of life, what you're trying to accomplish, taking as little risk as possible, but maximizing the return so that when this money is needed to supplement your income or for medical needs, whatever it is, it's more than what it is today where you can protect the money. Obviously, you'd have some risk, but with a conservative investment strategy, you should be able to grow it over time. So I'd head over to Moneywise Live, Dawg. Click on Find a C.K. You can interview a couple of C.K. is there in South Florida. Find the one that's a good fit for you. And go ahead and do those interviews now so you know where you're going to roll the money when the time comes.
Rose, thank you very much. Hope that information helps you. Glad you got through today. Again, my apologies. We were having some phony. We have paid the phone bill this month, haven't we? Always. Always do. Okay. Well, in that case, bring us up to date on the new money wise E magazine. I think we're in the middle of our, what, second or third virtual magazine. It's a quarterly publication. It arrives in your mailbox online. Absolutely free. That's probably the best part. And we're excited about it.
Yeah. And because it's virtual, that means it's colvard friendly, Steve. So it's it's effectually it's socially distanced. No, it's a great resource. And we'd love for you to sign up. Just head over to Moneywise Live. Dawid click subscribe and we'll send it to you. The new edition is coming out here in the next several weeks. We'd love to have one show up in your e-mail box free of charge. And it's just away on a quarterly basis that we can share great ideas, tips and give you biblical wisdom related to managing your money.
It's the Money Wise magazine. It comes out every quarter and you'll find it at Moneywise Live dot o r.g.
It's great information. It's biblical information, obviously, but we get a chance to have a little fun once in a while. We do some special interviews, so you should really check it out.
And of course, an easy way to check it out and sign up is money wise, live dot org. Money wise. Live is a partnership between movie radio and money wise media. My thanks to Judy, Amy, Clara and Jim Henry for their technical expertize today. Thanks for listening. Come back and join us again tomorrow for a brand new edition of Money Wisely.