Spirit-Led Woman

Want to receive SpiritLed Woman by email? Sign up here

Find Freedom From Debt


The SpiritLed Woman podcast is empowering women weekly to follow their purpose in Christ and boldly walk in faith. Listen at charismapodcastnetwork.com.

There are no quick fixes, but there are ways to gain control over bad credit-spending habits.

Many years ago, I read in a financial self-help book that if I had a problem with credit card spending, I should put the card in a bowl of water and freeze it. The idea was that it would be such a hassle to thaw it out, you'd have enough time to thoughtfully consider the purchase and avoid impulse buying.

Nice thought—in theory, that is. But here's a word of advice. If you have to thaw that card, don't put it in the microwave because it will (1) demagnetize the card and (2) melt the card into a misshapen mess.

Don't ask me how I know these things; I just did some, uh, research! Yes, that's it! I did research to discover these unusual facts in case you ever wanted to use plastic instead of paper money and you had all your credit cards on ice.

The best advice is to improve your financial health through plastic surgery—that is, by cutting up those cards.

My husband and I did it. We developed discipline through the "spend less, save more" approach, and we're in a completely different financial place than we were when we lugged around $40,000 in consumer debt.

The average consumer carries the largest percentage of his or her debt in credit cards—even more so than in a mortgage or car loan. You can cut spending in these areas, but the primary place most families need to look is at the thin piece of plastic in their wallets.

The Quick-Fix Fantasy 

Your email inbox is probably flooded daily with promises from the debt-consolidation industry that make claims such as "Debt relief is just a click away!"

Here are red flags that should go up when you consider consolidating your credit card bills:

1. Promises, promises. Some companies make claims that they will negotiate lower interest rates and reduce your monthly payments in one easy step. However, many of these debt consolidators build in a fee, usually 10 percent, as part of the monthly payment you make to them.

It's not worth paying someone else to do what you can do yourself. Go to the MSN Money website, and find out how to consolidate your debts.

2. Easy-does-it loan. Some consolidators might entice you with the ease of obtaining a debt-consolidation loan but could end up charging you more interest than you're paying now. You might end up with lower payments, but you'll pay more over a longer period of time.

3. Balance-transfer trick. You might be drawn by offers for low-interest cards, but the low rates generally last only a few months. Then you have to switch cards again to find another low interest rate.

This activity is often negatively interpreted on your credit report. If and when the latest low-interest card will not approve you, you are left paying the higher interest on the card you are holding.

If you've already made such a switch, formally close the new accounts and ask the credit card company to mark the account "closed at the customer's request." Otherwise, it will appear that the creditor closed your account—which would make you look like a poor risk.

Decide right now that you will apply all extra monies to paying down this debt. Use all unexpected income—an inheritance, a tax refund, overtime pay, an employment bonus, a pay raise—toward debt reduction.

The Best Moves 

These are a few of the best debt-consolidation options. Some of them may be a perfect fit for you:

1. Home-equity loan. This is an obvious choice that should be used with great restraint. The primary advantage is that it tends to carry low interest rates, and the interest you pay is tax-deductible (check with your tax specialist yearly).

But you will have to pay an origination fee that ranges from $75 to several hundred dollars, plus the cost of an appraisal and title insurance, so be sure it is worth it.

2. Refinancing a home. In a "cash out" refinancing option, the property owner refinances the entire loan for more than the property is worth and uses the extra cash to pay off credit cards. The primary disadvantage of this approach is that you are stretching your mortgage over 15 or 30 years.

The total interest cost can be pretty large, so you would need to keep two things in mind: (1) you would do this only once; and (2) you would concentrate on paying extra every month toward the principal, thereby shaving as much as a decade's worth of interest off your loan.

3. Refinancing a car. This is a secured loan, and you can borrow on it. But you need to calculate whether you will run out of car before you run out of car debt. It's very difficult to buy a new car when you owe more than your present car is worth.

Draw closer to God. Experience the presence of the Holy Spirit every month as you read Charisma magazine. Sign up now to get Charisma for as low as $1 per issue.

Get to know the Holy Spirit and how to interact with Him on a daily basis. Learn to enter God's presence and hear His voice clearly for yourself! Go deeper in your faith with Life in the Spirit and change your life and destiny. Are you ready to start your journey?

Your Turn

Comment Guidelines
View/Add Comments
  • Hillary Clinton

    What if Hillary Clinton Wins the White House?

    Polls have Mrs. Clinton leading by 11 points. The church must be prepared.

  • Holy Spirit prophetic

    7 Ways to Cultivate Sensitivity to the Holy Spirit

    Too many of God's people are led by fear, doubt, man-pleasing, presumption, assumption, idols ...

  • What if You Could Save $500 This Week?

    What if You Could Save $500 This Week?

    Start saving for emergencies today with the $500 Savings Challenge by brightpeak financial. It's chock-full of inspiration, great savings tips and the motivation to make a dent in your savings—for real! Go to 500savingschallenge.com to sign up!

  • Guarding the gates of your heart will keep the demonic and evil out of your life.

    Keep the Demonic Out of Your Life With This Oft-Overlooked Spiritual Warfare Strategy

    The enemy knows his limitations. Limit him.

  • Highway exit signs

    Prophetic Word: Watch for the Exit Signs to Light Up This Season

    Don't be afraid to get your hands dirty in the harvest fields. The "barnyard anointing" ...

  • There Are Times in History...

    There Are Times in History...

    While who becomes president is significant, the truth is, the change America desperately needs does not begin in Washington, D.C.

  • Finger pointing

    The Accuser vs. Donald Trump—and Us All

    This isn't a political persuasion piece, but a current-event case study in the strategies of ...

  • Passivity can be a real relationship killer.

    One Toxic Temptation Many Men Face—And How to Overcome It

    And no, it's not pornography or adultery.

  • Daily scripture reading, meditation and prayer can seem elusive with your busy schedule.

    10 Small Steps to Deeper Intimacy With Holy Spirit in Your Quiet Times

    If deep quiet times seem just out of your reach with your busy schedule, try one of these ...

  • Jezebel puppets

    10 Ways to Spot Jezebel's Spiritually Slick Undercover Con Artists

    It's time to stop tolerating Jezebel in all its many manifestations.

  • Continue Your Journey with the Holy Spirit

    Continue Your Journey with the Holy Spirit

    Follow God on the most fulfilling journey of your life with Encounter the Holy Spirit! Break away from past hurts and press into the One who wants a personal encounter with you.

  • Dream the Unimaginable In His Presence

    Dream the Unimaginable In His Presence

    Reach your full potential and be led by His Spirit. In His Presence takes you to a deeper understanding of who God is and how he communicates with us.

  • Set Your Spirit on Fire

    Set Your Spirit on Fire

    Receive the power and gifts that come through the Holy Spirit Baptism. Don’t go empty-handed; accept all that He has for you! His power is available to those who ask.

  • Put on the Full Armor of God

    Put on the Full Armor of God

    Break every stronghold with the power of the Holy Spirit. Use the power of your tongue to declare and decree the Word of God. Witness heaven move on your behalf.

Use Desktop Layout
Charisma Magazine — Empowering believers for life in the Spirit