6 Essential Practices for Having a Credit Card

A man couldn't understand why his credit card kept getting declined. Every time he logged into his account, it said he had an outstanding balance.

Hi, I'm Rob West. All kidding aside, credit cards are a powerful convenience that can make your life easier or a lot more difficult depending upon how you use them. I'll talk about that first today, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live! Biblical wisdom for your financial decisions. Okay, so first I want to give a shout out to Faith and Finance contributor Art Rayner for a great article on this topic, Six Essential Practices for Having a Credit Card, and we'll put a link to it in today's show notes. One of the questions a lot of people ask is, how do I get a credit card?

It could be for themselves or maybe their teenager or even a friend. How do I get a credit card? But we're almost never asked, how do I use a credit card?

So what are the essential practices for using that slip of plastic in your wallet? Well, first is maybe have only one of them. Limit the number of credit cards in your wallet or purse. You can get into a lot of financial trouble with just one credit card.

Imagine the damage you can cause with four or five of them. If you must have two, make sure it's for a good reason, like one is personal and the other is for business. Also, do not get a store credit card for any reason. They have ridiculously high interest rates. Bottom line, if you have a fistful of credit cards, you probably have a spending problem.

Our second essential practice is never carry a balance. Credit card interest rates are always high, but in the past year they've gone up considerably due to the Federal Reserve raising rates to curb inflation. Art uses the example of purchasing a furniture suite for $5,000 with a card that charges 20%. Making only the minimum monthly payments of $200, it will take 12 years to pay off the balance and the real cost with interest will be nearly $8,500. So the first time you can't pay off your balance, consider chopping up your card. You won't regret it. Best practice number three, if you're not on a budget, don't use a credit card at all.

That makes a lot of sense. If you don't know how much you have to spend, even for essentials like gas, groceries and clothing, how do you know when to stop buying things? Your credit card certainly won't tell you. At least if you're not on a budget, but you're using cash only, you have to stop when the money runs out. With a credit card, you don't have to stop. You can keep spending your way right into debt.

So no budget, no credit card. Next on the list of essential credit card practices is don't play games with credit cards. That means don't hop from one card to another as you transfer balances to get a low introductory rate. Remember, you're not supposed to carry a balance at all, but if you do, the last thing you want is to keep opening new card accounts. For one thing, there's usually a transfer fee of 3% or more, so you're actually adding to your balance. Plus, if you don't cancel the first card, which a lot of people don't, you might keep using it and end up doubling your debt. So instead of transferring balances, use the snowball method to pay your debt quickly, putting extra money on the smallest balance first. If you have more than $4,000 in credit card debt, contact our friends at ChristianCreditCounselors.org to get on a debt management plan.

They'll get your interest rates lowered so you can pay off your debt 80% faster. Okay, essential practice number five, never get cash advances from your credit card. It's probably the most expensive money you'll ever borrow.

The average APR on these loans is now just under 25%, and on top of that, the average fee is almost 4%. If you're taking cash advances from your credit card, it should be a wake-up call that you're not doing something right with your finances. You need to learn to live on less than you make so you can save up an emergency fund. If you have money in savings, you'll never need to get a cash advance on your credit card. Okay, here's our last essential practice for having a credit card, always pay on time. For one thing, you'll get a negative mark on your credit report and lower your credit score if you're 30 days late making a payment.

But it will also cost you money. You'll get hit with a late fee, and the card issuer can raise your interest rate just for making a late payment. So put your card's due date on your calendar, or better yet, make your payment again in full the same day your bill comes in the mail. That way you don't have to worry about forgetting to pay. So, those are the six essential practices for having a credit card. If you follow them carefully, a credit card can be a convenient, useful tool.

If you don't, a credit card can quickly become a financial nightmare. Alright, your calls are next. 800-525-7000. That's 800-525-7000. We'll be right back.

Grateful to have you with us today on Faith & Finance Live. I'm Rob West, your host. Alright, it's time to take your calls and questions. 800-525-7000.

That's 800-525-7000. We'd love to hear from you, and we have a few lines open today. Let's dive in and see if we can help you apply the big ideas, themes, and principles from Scripture to the financial decisions and choices you're making in your finances every day. We're going to begin today in Pennsylvania, and welcome Jeff to the broadcast. Go right ahead.

Yeah, Rob. Thank you for your godly ministry. I have a question about, is it wrong to give the tithe directly to the pastor?

Well, let me ask a few questions. Is it wrong? No. But would I direct the tithe to a specific purpose, whether that's an individual or a program?

No, I wouldn't do that either. I think the big idea behind the principle of the tithe is to bring a tenth of your increase to the storehouse, which would most equivalent be— the most clear equivalent would be the local church, allowing then the leadership of the church to determine how that's used, both in programming and salaries and anything else. And directing it is kind of really making that decision on behalf of the church.

But give me a little bit more insight into why you would want to direct it. Well, the church is in good shape financially, both in missions and in general, in building fund. The pastor just has some special needs. He was a missionary for a while, and he came off the field, and now he's a pastor, and he just has some financial needs. And he's not wasteful, he's not wasteful, and he's just in need, and I've just kind of been burdened. I like to help him out, and so that's why I ask that question.

Yeah. Well, it's a good question, and I think ultimately this is between you and the Lord, so I would encourage you just to pray through it and allow the Lord to direct you. But again, I think we could get into the habit there of saying, well, I think I want to place my tithe here.

Man, we really need more in the missions budget over here. Man, I wish this person was a little more highly compensated over there, and then all of a sudden the body of Christ is not supporting the work of the local church, but we're kind of all directing our tithe, and I think that would become really problematic. So I would say, you know, if it's a one-time thing, you just want to bless your pastor, great. But I wouldn't get in the habit, if it were me, of making your tithe to a specific project or person, regardless of who it was.

I would make that a one-off, something you just bless him with, as opposed to making that your kind of normal protocol with regard to your tithe. Does that make sense? Yes, it does. God bless you. I appreciate that. All right. Absolutely, Jeff. Thanks for your call today. Thank you very much for that encouragement. We appreciate it.

800-525-7000 to Green Bay, Wisconsin. Hi, Mary. Go right ahead. Hi. Good afternoon. Hi.

How can I help you? Basically, I have an account with a major brokerage firm, and we have been with them, my husband and I, for many years. I was blessed with an inheritance of a large amount of money, and since that money has been put into my account, it was transferred over from the person that had it before, to me. They have said that they want to have a financial advisor, along with the broker that I had before. I was paying no fees for the brokerage account, but now they want to add the financial advisor who is going to charge.

They'll be charging 1% on the funds that I have. Yeah. And you're wondering whether that's an appropriate fee? Yes. Yes, I am. Okay. Well, first of all, I live off the... Go ahead. I live off the dividends and stuff, and so that's why I'm just wondering.

Yeah. Well, the first question is, do you need a financial advisor making the buy and sell decisions for you, or is it something you want to do yourself? I like the idea of you having an advisor. It takes the onus off of you. You don't have to have the skill and experience and knowledge to manage it. It also removes it from being an emotional decision, which for an advisor who's taking a rules-based approach and applying an investment strategy for the long haul, allows him or her to weather some financial storms, perhaps a little bit better.

Often when we're managing our own money, we might be a little quicker to move out of the market to try to time the market, which is a losing proposition when we look at the data behind it. But even if you weren't to do that, I think just having somebody who's waking up every day thinking about managing this money, protecting it, and growing it in an appropriate way makes some sense. Now, if you say, Rob, I feel like I have the time, the skills, and the training to do that, then absolutely you can manage it yourself. I just find for most people, especially once they've built up a significant nest egg, having that advisor to delegate that responsibility to makes a lot of sense.

You'd still be in regular communication, understanding everything that's being done. It's all being done in light of your values and priorities, goals and objectives, not the advisors, but they're making the ultimate decision. If you decided to go with an advisor for the reasons I mentioned or others, what is the appropriate fee? One percent for somebody to take discretion over the funds, meaning they're making the decisions for you, is a very appropriate fee based on the assets under management. So for a million dollars, you're talking about $10,000 a year.

It sounds like a lot of money, and it is, but it's also a big responsibility. And that fee based on one percent would be what I would call normal and customary. Is that helpful?

Okay, I appreciate that. Yeah, they wanted to rejuggle the stocks in my account because I had 60 percent energy stocks, and so they wanted to balance out the account more also. Well, and I concur with that idea as well, and I think that's one of the other benefits of an advisor is we can get, perhaps because we like a sector or we inherited stocks that were already in a sector, and maybe we're trying to honor the approach of the person that we inherited it from or for other reasons. Maybe we worked in that sector. We can often be highly concentrated in any one sector.

And part of the job of an advisor is to apply the wisdom of Ecclesiastes, which means we don't put all of our eggs in one basket. We're staying properly diversified. And although energy has done well, I don't like the idea of you being that highly concentrated in one sector. If it were to get out of favor, if the price of the natural resources declined, you know, if we move more toward a market that's focused on growth stocks, you could have more volatility than you'd like to have, even though those are producing probably great dividends that are helpful to you. It could introduce more volatility into the portfolio than you'd want.

So I like the idea of them diversifying you out of that sector, not entirely, but perhaps where you're not as highly concentrated as you are today. I thank you very much. I just didn't have any idea. Thank you so much for accepting my call. You're very welcome, Mary. God bless you. John in Highland, Indiana.

Go ahead, sir. Hi, Rob. How are you?

Doing great, thanks. Good question regarding your opening about credit cards. Is it wiser to have a prepaid credit card versus a monthly reoccurring credit card charges for like my I pass purchases online, stuff like that?

Yeah. Well, I think the key is that you have something that's going to report to the credit bureaus because you want that consistent online payment being reported to the bureau. A lot of times those prepaid cards don't. So, you know, the interest rate really isn't a concern if you're paying it off every month, only using it for budgeted items, which I recommend. And I like the ability to get some cash back as long as you're not paying an annual fee. They're just redirecting part of that merchant rebate back to you. So I would stay with a traditional revolving account credit card because of the benefit of you getting that positive credit history reported to the bureaus. That's just my preference.

There's also a few more protections on that one as well if it's compromised. Thanks for your call, John. We appreciate it. Back with much more on Faith and Finance Live just around the corner.

Stick around. Hey, great to have you with us today on Faith and Finance Live here on Moody Radio. I'm Rob Lask. We're taking your calls and questions today on anything financial with lines open. Eight hundred five to five. Seven thousand is the number to call. That's eight hundred five to five.

Seven thousand. Before we head back to the phones, let me remind you here as we head toward June the 30th. This is a critical time for Faith and Finance, a listener supported ministry. We do what we do every day as a result of your generous support. And as we head toward our fiscal year in just 10 days from now, you're giving and support is really vital right now. And so if you'd consider a gift, if you're a part of our faith and finance community and you value this program, maybe you found some of the advice helpful in your own life and you could make a gift of any amount.

And we mean that whether it's forty four hundred or four thousand dollars, it all helps. In fact, we'd like to have more of you together, even if they're smaller amounts, just so we can have the body of Christ rally to support this ministry. It means a lot to us to give securely and quickly online. You can do that at our website, faithfi.com.

That's faithfi.com. And just click the gift button. And if you could do that before June the 30th, that would be a huge help to us. All right. Back to the phones we go.

By the way, a few lines open, 800-525-7000 is the number to call to Fort Smith, Arkansas, on Bot Radio. Brian, go right ahead. Yeah, I wondered what your opinion was on a transfer upon death on a mortgage to my brother versus leaving it in a will to him. Would he pay more money on it for the improvements or how does that work on a transfer upon death?

Yeah, it wouldn't have any effect on him. Really, the only effect is on you in the sense that using a TOD, if your state allows it, avoids the probate process. So the transfer would happen a bit more efficiently in that, you know, it would pass outside of the probate process, which would charge expenses to the estate. And it's a little bit of a longer process.

So that's really the main difference. I mean, in terms of him receiving it, it would just happen a little quicker, but there would be no additional out-of-pocket expenses with him one way or the other. And from a tax standpoint, whether he receives it through the probate process, according to a will, or he receives it with a TOD, he's still in both cases going to get the stepped up cost basis as of the date of death.

So he would enjoy that either way. So I think, you know, adding the TOD would just pass it a little more efficiently, although I would say you still need a will to pass other assets and belongings. And if you had minor children, it'd be critical. So you could name a guardian.

I don't have minor children. So I do appreciate all that information and love listening to your show. All right. Thanks, Brian. I appreciate that. Thanks for calling today. Let's see.

To Lowell, Indiana. Hi, Ann. Go right ahead. Hi. Thank you for taking my call. I'm so sorry. Yesterday I called and this is my second call to you. I didn't get the answer to this question. Well, we start to charge after the first one, Ann. So just kidding.

You go right ahead. Well, we we we lived in Chicago and we sold our house and a rental property and we've moved out to Indiana and we're looking to buy another rental property. So we were wondering, is right now a good time or should we wait? Yeah, it's not a great time to buy. You know, if you are moving a primary residence and you're selling out of a home that you owned from an existing home, then you're going to still get top dollar with a very strong housing market, even though it's softened.

We really haven't seen much in the way of declines on housing prices. There is more inventory than there's been. So it's not a raging seller's market where you're having, you know, lots, multiple bids, people paying 20 and 30 percent above asking. You wouldn't think about having contingencies in there when you're selling because there's so many competing offers. We don't have that situation. There is still plenty of offers coming in, but it's a little slower.

You certainly can consider, you know, contingencies in your offer. So it really has converted to more of a buyer's market. But the things working against you right now are prices really haven't come down very much.

So you're still paying top dollar in a sense. And that's driven largely by the fact that inventories nationwide are just not there. We need more houses in this country to meet the demand that we have.

That hasn't changed. And then secondly, we have high interest rates right now, which means if you're borrowing for this rental, you're already getting high rates. And then for a rental property, you're going to have to add one to two percent, probably on top of already high interest rates of six percent plus. So it just makes the cost of ownership pretty high. If you had the ability to wait, you might want to consider waiting maybe a year because I would expect interest rates to be coming down in 2024.

You would benefit from that. And we'll have to wait and see. Are we going to hit a recession here? Most economists think we will.

How deep will it be? Depending upon how deep the recession is, if in fact we have one, that will have something to do with how housing prices respond. But if you're just looking purely at the entry point, I would say this isn't a great time, largely due to the fact prices are still high and mortgage rates are really high. OK, very good.

Thank you so much. I will say, though, and it really is market dependent. And so if if you know the market, you've run the numbers, you've got enough in the way of a down payment. You want to be a landlord. You know, you can generate the income that you're looking for.

Then I would say, you know, it's not something to immediately toss out. I mean, look at it like a business. And then you've just got to evaluate what's my entry point? What are the rental rates? How much will it cost for me to service the debt? Will I have enough to pay the taxes and insurance and maintenance and marketing and at least break even to pay the mortgage? If not, you know, have some income. And if all of those things work out, then great.

But if, you know, you feel like you're getting a little squeezed and perhaps you're not going to do as well as you thought in light of primarily where the interest rates are right now, then I think it's probably a good time to wait. We appreciate you checking in with us today. God bless you.

Thanks for being on the program. You know, folks, as we think about applying biblical wisdom to financial decision making, when we look to scripture, one of the big ideas that we see in God's word around managing God's money is contentment. That is understanding that we're to be found faithful with whatever God has provided to us doesn't mean we shouldn't try to get a better job, make some more money. But whatever God has given me is enough today. Can I live within that and even have some margin to give generously and accomplish my goals in line with my values?

Contentment is one of those big ideas we all need to pursue. We'll be back with much more on faith and finance live. Thanks for joining us today on faith and finance live.

I'm Rob West. We're taking your calls and questions today on anything financial. We've got some lines open. So what are you thinking about today?

How can we help you apply biblical wisdom to your decisions and choices financially speaking? Let's hear about it. 800-525-7000. Again, Gabby T standing by to take your call today and we'll get you on the air quickly. 800-525-7000.

Let's head to Cleveland, WCRF. Hi, Agatha. Thank you for calling.

Go right ahead. Thank you Rob. I'm calling to ask when is it appropriate for you to give the last four digits of your Social Security when you're trying to transact business? I called Synchrony Bank. I had made an inquiry. They sent me a letter and I called them. And the woman, the lady acted like she could not find my account with my last four and I made the mistake of giving her my whole Social Security even though I had that misgiving. So I received a letter today from Credit One Bank in Las Vegas. Somebody opened an account.

But they charge for you to decide. They charge like $7 for the credit card that you wanted and they charge, I got the total was $81 and it's for, what do you call it, like a fee, some kind of fee. So I called them and I spoke to three different people and my question is when is it appropriate to even give your four digits? I've learned my lesson with my Social Security and I informed them that I'm still calling to report it as a scam because it was.

I've not been there. I don't know who had access, probably the lady I spoke to at Synchrony. Thank you. Okay, so you have an account at Synchrony, is that right? Yes. Okay, and you placed the call to them. They didn't call you, is that right? I had called them initially or actually I had talked with, yes, I had called them initially and they sent me a letter which I responded to about that inquiry. Okay, and then you called them back? Yes.

Okay, well a couple of thoughts. I mean, one is I would not give your Social Security any part of it, including the last four, to anyone who contacts you regardless of what it says on the caller ID because all of that can be amassed and appear to be coming from a legitimate institution, one even that you do business with. I would only give out the last four of your social when you are calling in and there really shouldn't be a reason why you'd need to give your full social to them unless you're opening an account which you would do online or with a paper form and then you would need to provide your full social because they need to be able to report certain documents to the information to the IRS and so forth. But only give the last four of your social if you're contacting customer service when you initiate that call using the toll-free number on the back of your card.

And don't ever give it out to anyone calling you regardless of who they say they're with and never click on a link in an email and provide any personal information. With regard to an account that's open fraudulently in your name, if that has happened, there are several steps to take. Number one, contact that card issuer. Let them know that that was open fraudulently.

Ask them to close the account. Number two, freeze your credit. So you'll want to contact each of the three credit reporting bureaus, TransUnion, Equifax, and Experian, and you'll want to freeze your credit. That simply means that they're going to lock your credit file, you're going to create a four-digit PIN number, and anytime you want to open an account, whether it's a credit card or take out a loan for a car or a house, you're going to need to provide that four-digit PIN for the lender to pull a copy of your credit report to determine whether or not they want to extend credit to you.

If somebody tries to open an account fraudulently in your name, they'll be stopped in their tracks because they won't have the PIN number. That freezing of your credit report has to be done with each of the bureaus separately, and it is free. So I would do that immediately. Also, if you determine an account was opened in your name fraudulently, I would place what's called a fraud alert on each of the three credit bureaus. That will just inform anyone that's checking your credit file that that has happened, and they can be more aware of that. I would also order a copy of your three credit reports just to see if there's any accounts you don't recognize.

You'll want to do that at AnnualCreditReport.com. I hope that's helpful to you. I know that's a lot, but I think those are the steps to take with regard to giving out your personal information and addressing this fraudulent account that you've identified. Thank you for calling, Agatha. We hope that you can get this sorted out here quickly. To Woodstock, Illinois. Hi, Larry. Go ahead, sir. Hi, Rob.

Thank you. I have a stepdaughter and son-in-law that have very poor credit, and I'm trying to get into renting a property, and I'm trying to see what I can do to help them improve their credit. One thing I've heard is putting them on as an authorized user on a credit card, and I'm not sure how that would affect me in the long run. Well, it won't affect you at all unless you give them one of those credit cards and then you allow them to start charging on it, and then that might affect you a lot because you'd have a debt that you're responsible for. If you simply add them, and everybody's on board with this for the purpose of building their credit as an authorized user, they don't get a copy of the card, they're not using the account, then all that's going to happen is they're going to inherit your credit from that account. So every time the credit bureau reports, or every time your card issuer reports to your credit file, it will report to hers as well, and as long as you're paying your bills on time and you've got good credit, that credit will land on her credit file just as the same time it lands on yours, and that will provide positive credit, which will help her score over time. The other thing she could do would be to open a secured credit card, which is just a card with a certain amount on deposit that she might set up an automated charge for, just a few dollars a month for a budgeted item. She pays it off in full, and that's going to be reported to her file each month as well. So what we want to do is just get enough positive credit history going her way that it's going to help to improve her credit because oftentimes the lack of credit is just as big a problem as having bad credit. So I think those are the next steps for her, and it's going to take some time, but at least this will get her in a situation where hopefully over time she would be able to have a score that would allow her to qualify for the best rates and terms. Does all that make sense? Yeah, we already have her getting in to get a card and starting to use it.

Now when you say it takes some time, six months plus. Does she have bad credit? Does she have some black marks on her file? She actually has never had credit, and then her husband, his credit's like $519, and he's probably got some bad things against him. The hope here would be to give the greater amount.

They probably have credit under $5,000, and if more than one family could add to that, we could easily quadruple that or more. Yeah, very good. Well, I think that's the key. It's going to take some time. Yeah, it could take six months or more. The other thing they may want to look into is something called Experian Boost. This is a new service from Experian, one of the three major credit bureaus that allows her to get credit for paying her utility and phone bills on time. And that will help to improve her FICO score, which is one of the primary scoring models that's used by most of the major lenders. So I think between the adding as an authorized user, the secured credit card, and then Experian Boost, that will certainly get her pointed in the right direction. You could also look at something and you could just do a web search for this, something called a credit builder loan, which is a loan that you repay ultimately to yourself, specifically for the purpose of building credit. And that's going to come in not as a revolving account, but an installment account, which is a different type of credit.

That will help also. We'll be right back on Faith and Finance Live. Stay with us. Great to have you with us today on Faith and Finance Live. Taking your calls and questions, 800-525-7000 to JP in Florida. Hi JP, go ahead. Hi, thank you for taking my call.

I have probably a very simple question for you. I have had for a very, very long time four credit cards. Two I use all the time. Two others I never use because I'm trying to only use two credit cards and they are platinum cards. So I pay a significant $150 a year because they're platinum cards. Will it affect my credit scores if I personally cancel those cards? It may temporarily, but I wouldn't allow that to stop you. I don't like the fact that you've got these very expensive annual fees for these platinum cards.

No doubt there's benefits, but my experience is unless you're traveling a lot for work and maybe your company picks this up as a business expense so you have access to the sky clubs and things like that, it doesn't pay to really have these platinum cards just because those annual fees can be $150, in some cases $200 or more annually. So I would absolutely get rid of that so you don't have that unnecessary expense. Could your credit score drop when you close those accounts? Absolutely. But it will be temporary and it will be minor.

Here's why. If that credit history comes out of the mix, that could affect it. Also, it's going to drive your credit utilization up if you're carrying a balance or even if you have a balance being reported at the end of the cycle each month prior to them receiving your payment. If the total available credit is coming down because now those two cards are no longer contributing to your total available credit and you're carrying a balance or it's showing a balance prior to you paying it off each month, and that total balance that you're carrying or running each month is above 30% of the limit that's now been lowered because you closed those two accounts, that could cause your score to come down. But in most cases, closing those accounts will just cause it to be a temporary drop of maybe 30 or 40 points and a couple of months later, it will come right back up. So I wouldn't be concerned about it. I like the fact, again, that you'd be getting rid of that unnecessary expense.

And here's the bottom line, JP. Unless next month you're going out to buy a car and need a loan or buy a house and need a mortgage, it really doesn't matter kind of what your credit score is doing month to month. If, however, you are in the market for one of those and need to qualify for a loan, then now is not the time to close it.

But apart from that, I would say go ahead and close those accounts. Well, Chris, I haven't used them in three or four years, so they're expensive, and I do charge anywhere from $4,000 to $7,000 or $8,000 a month on my other two cards, and I always pay it off 100%. So the two cards I'm using, I pay off completely at the end of the month. Yeah. Just know, though, that the balance you're charging, even though you're paying it off, if you pay it by the due date at the end of the cycle, whatever balance you have, that $7,000 or $8,000 is being reported to your credit file as the balance, even though it's coming down to zero shortly after it's reported to the credit bureau.

So if you did see a decline because that balance that you're running every month right before you pay it off is above 30% of your limit, that may be a reason to start paying it earlier so that at the end of the cycle, the balance is at zero, and that's what's being reported to the credit bureau. Does that make sense? Yeah. Well, it's other deducted on the day it's due. Right. But that means that it's going to hit your credit file showing that balance, so you just may want to back that up and pay that earlier if you wanted to try to get your balance that's reported to the credit file down so that you're not going above that 30% limit.

Just something to think about if you're really concerned about your credit score. Thanks for calling today, JP. God bless you.

To New Mexico. Hi, Grace. Go right ahead. Hi, thanks for taking my call.

My mother passed away a few months ago, and she left my siblings and I three inherited IRAs, and I wanted to combine mine into one place, but I'm not sure really what to look for as far as picking the best one. Excuse me, the best one for me. So I just kind of been sitting on them and just waiting and waiting and I really need to do something. And I have a well, maybe after this, after you answer this, I could ask another question.

Sure. Yeah, I think it just depends on how you want to approach it. Are you considering having an advisor manage these IRAs?

I am considering. Okay, I would wait until you make that decision because once you select the advisor that will determine the custodian for the IRAs, and then those will be transferred over unless you need to make a decision right away. You may want to work through that process because one advisor may custody their assets at Fidelity and another may use Schwab and another may use yet another broker dealer. So you really need to wait and select the advisor first if you can.

Okay, now what about having an advisor? Don't you have to have a certain amount of money in order to do that? Well, yes, in the sense that many investment advisors will have a minimum in terms of the assets under management before they'll take the account. How much will you have in total investable assets?

Well, maybe about $50,000, $60,000. Yeah, that will often be below the minimum for many investment advisors. And so another option would be soundmindinvesting.org. They have the ability to work with investors, even those just starting out all the way up to those that have significant assets and, you know, six figures plus. So I would check that out as a good option soundmindinvesting.org. If you wanted to take more of a passive approach, you could use a robo advisor, which is more of an automated solution using an algorithm that builds portfolios using low cost exchange traded funds. These are basically what you call index funds. And you could look at the Schwab intelligent portfolios as one of those options.

But I think soundmindinvesting.org may be a good option for you. Yeah, it sounds like it. I think I will definitely contact them. Okay. Is there time for another? Yes, ma'am. Go right ahead. Sure.

Okay. Well, my mother's property is in probate. And we've been told so many different stories regarding her house payment. Pay them, don't pay them, wait till it's out of probate. Tell me what to do. I mean, we are making the monthly payments.

Yeah. But they are giving us such a hard time because they won't allow us and I'm the credit union. They won't allow us to have access to her records. Now we know that it's the right thing to pay we want to. But I mean, they have to go through jump through hoops just to accept our monthly payment. So should we wait till it's out of who is the executor? I mean, you if a mortgage isn't paid during the okay, if a mortgage isn't paid during the probate administration that lender will eventually foreclose and so you want to keep that current. But once the the probate is opened, then the state's executor, in this case, your sister, who's the personal representative of the estate is really charged with paying all of the ongoing expenses, including that mortgage.

So she should be paying that and she should be able to demonstrate that she's the personal representative. Okay, so we'll know my siblings and I are all pitching in and you know, because we're going to inherit the house. So all right, so we'll just keep on making the monthly payments. Got it.

Yeah, I think that's the the way to go for sure. We appreciate your call today. Thanks for being on the program. God bless you quickly to Oklahoma. Hi, Kim. Go right ahead. Hi, thank you so much for your time.

Sure. I am calling I in myself and my brother inherited a home with my mother's passing, and she still owed some money on it. This was about a year ago. So my husband and I got a loan and paid off the house and then paid my brother out so that it would be just our house. And it's gone through probate and somebody told me that we've been working on it for like a year. It needed a lot of work and and somebody told me that I'll have a large portion of taxes to pay on it.

And specifically capital gains taxes or something else. I have no idea I would. I was hopeful that this would be, you know, a lot of success for my husband and I and our family.

Okay, yeah, there shouldn't be. So has it been has it been sold yet? No, I think we're going to put it on the market this weekend. Okay, well, one of the benefits of inheriting a home as opposed to receiving it some other way, like a quick claim deed or something else is that through the inheritance process, you get what's called the stepped up basis. So essentially, when you inherited the property, the cost basis, which determines whether or not there's any capital gains tax that's owed when it's sold. The cost basis is reset to the market value as of the date of death. And then if you turn around and sell it on a timely basis, essentially, there's no gain because the market value was stepped up to the date of death. You're now selling the property for what is probably that same market value. And now there's no gain and you keep the full proceeds. So unless there's some sort of tax lien out there, like a federal tax lien or some other type of tax lien, which you could check either by searching at the IRS.gov website, or the county records office, where the deed is filed just to see if there's any liens on the property. Apart from that, there shouldn't be any taxes that you would owe.

That's fantastic. We already did check the taxes at the county level and there aren't any liens against it. Okay, great. Yeah, so you should be in good shape. Just check with your CPA because obviously anytime you have something unusual like this that's out of the ordinary, you just want to make sure everything's being filed properly from a tax standpoint.

But generally speaking, you should be fine with capital gains. Thanks for your call today. Faith and Finance Live is a partnership between Moody Radio and FaithFi. Thank you to Dan, Amy, Gabby T, and Robert. Couldn't do it without them. Have a great rest of your day and come back and join us tomorrow, will you? We'll see you then. Bye bye.