Book Study
Lesson 3

Be Free in Christ

With credit, you can be:


The costs of being enslaved include:

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Never own car or home
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Getting sued by creditors.
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Paying hundreds in fees that could have gone towards ministry or saving.
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Having creditors calling relentlessly.
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Right now, how free are you from the dangers of credit cards?

1: Totally enslaved.....5: In danger.....10: Totally free

Credit Video

Dangerous payday loans

Federal Reserve:

Half of all Americans unable to come up with $400 without borrowing or selling something.

How they work

Payday loans are advertised as short-term credit lines, typically extended for two weeks to help consumers get through to their next paycheck.

Each year, 12 million borrowers take out payday loans averaging $375 each.

Typical payday loan example:

Borrow $200 for 14 days. Pay between $23 and $76 in interest. This equates to almost a 1,000% annual interest rate (APR).


  • More than 80% of payday loans are rolled over within a month — borrowers borrow more money to pay off the principle, circling deeper into debt. 
  • The median payday loan borrower is in debt for more than six months, and 15 percent of new loans will be followed by a series of at least 10 additional loans. 
  • A typical borrower takes out eight loans during one year, paying an average of $520 in interest on a $375 loan. In many cases, the cost may be much higher. 
    • In 2008, Naya Burks—a single mother living in St. Louis—had a $1,000 loan turn into $40,000 debt, as the 240% interest accrued.
  • One out of every five borrowers who offer their car as collateral lose their car.

Top Reasons Listed for Payday Loans

  • Highly convenient – there are more payday stores than McDonalds stores!
  • 86% Essentials, Food, & Utilities
  • 24% Fuel & Auto
  • 42% Extras, such as holidays, clothes, luxuries, & travel.

Alternatives to Payday Loans

#1 Emergency Fund

  • Having 3-6 months of cash savings will eliminate almost all short-term cash crises. You are the lender – and you are a good lender!


  • Call your utility company or creditor to ask for extended payment terms.

Pawn loans

  • If you can’t pay the lender back, they simply keep the pawned item and you owe nothing further.

Credit union loan

  • Often work with consumers with poor credit histories to borrow up to $1,000 each on a six-month loan at very low rates.

Credit cards

  • Much cheaper interest rates than payday loans.

Pay advance from employer

  • Some employers offer short term loans to bridge the gap.

401(k) loan

  • Low rates, but only use if absolutely necessary.

Loan from family or friends

  • Offer to pay interest (just not 1,000%!)

Best Lender: Yourself

The emergency fund is a pool of money that you draw from during emergencies. You essentially “lend yourself” money. You decide when to pay yourself back. No interest. No collections. No hassle. You are a great lender!

EXAMPLE: You have an unexpected car repair of $350.

Emergency Fund

  • You pay the $350 right away with no interest,
  • You decide when to pay yourself back.
  • No deadline.
  • No interest or fees.


Credit Card

  • Assuming a good interest rate of 15.99% APR, you will pay $25 per month for 16 months.
  • If you fail to pay a payment: lots of fees, hassle from collectors, the loss of your credit score, and possible bankruptcy/legal fights.


Payday Loan

  • $15 for every $100 borrowed for 14 days. 391% annual interest rate (APR).
  • Must pay back in 14 days.

TOTAL COST: $403 (since 80% do not pay back right away, it is likely total cost will be much more than this)

Cunning Credit Card


It is something to be feared because it can literally destroy your life.


It is not necessarily bad because it can serve a useful purpose – within certain limits.

At its core, a credit card is a product.

  • But it is 2 products in-one, with one of its products being highly hidden, which makes it cunning and dangerous.

A credit card company’s plan to devour your money life is a diabolical plan that involves three-stages.


In the first stage, credit cards are simply sold as a way to buy things without having to have cash. This first stage DAZZLES us with bright, exploding points that light up the night sky every time we swipe our card.


After dazzling us, we accept the Trojan horse into our homes as we get hooked to using it. Studies have shown that credit cards remove a critical barrier to spending as they allow us to delay the consequences of our spending since we can buy something without seeing any immediate consequences. Getting something without an immediate consequence actually sends a reward to our brain called DOPAMINE, and we get more of a thrill from shopping.


The last stage of their plan is to overcome us and CONQUER US. They do this by taking advantage of a flaw in the human brain known as anchoring bias. Anchoring bias means that our brains anchor to numbers that they see first. Credit card companies try to make sure that the number that we see first is the minimum balance. Although most people never initially intend to use a credit card to borrow money, only a quarter of people actually pay off their full balance.

A Very Bad Lender

If you do not pay your credit card balance at the end of the month, you are now officially using your credit card as lender. Credit card companies are very bad lenders.


  • The Annual Percentage Rate (APR) is the interest charge that will be assessed on your outstanding credit balance. It is insanely high, ranging from 12-35%. To put that in perspective, I recently borrowed $500,000 to buy my home, and was assessed a fixed APR rate of 2.99% over 30 years.
  • Most APR rates are variable rates, which means they can change anytime, and love to go up.
  • If you have $6,000 credit card balance, APR of 15%, and paying $76 minimum monthly payment, it will take 29 years to pay off loan with

    $20,000+ of interest paid.

Minimum Payments

  • This is the lowest amount of money that is needed to keep your credit card product working.
    • Once we anchor our minds to the small minimum payment, say $15 a month, it is too shocking for our brains to then adjust to the larger full balance, like $2,000. So, we naturally avoid thinking about our full balance. This is why only quarter to a third of people actually pay off their full balance.

Default Rate

  • If you miss your monthly payment, you are considered in breach of your contract, and a new, much higher default interest rate (30%+) will be assessed on your outstanding balance.


  • In addition, if you miss your monthly balance, even for just one day, you will be charged a fee (usually $40-$60) on top of the higher default rate interest charge.

When to Cut Em' Up

I use my credit card as a medium of exchange.

I also like getting a few hundred dollars cash back every year.

However, I will cut up my credit card if: I am assessed a fee or interest charge MORE THAN 2 TIMES A YEAR.

If that happens, I am no longer responsible enough to have a credit card.

Every monthly credit card statement will have a ‘Interest Charged’ table showing whether you have paid interest. If it is not $0, then you are using your credit card as a lender.

Make all interest and fees charged is $0
If not, it is likely best to cut up your credit cards and switch to a debit card.

Good rewards?

  • Usually, it is a choice between cash back and travel points.

$0 Fraud Liability?

  • Most card have this: it ensures that you will not pay any money on unauthorized charges.

Purchase Protection?

  • Short-term insurance protection from theft or damage on recently purchased items (usually 90 days from purchase).

Favorable APR?

  • Lower is better, but this does not matter if you are not going to use it to borrow money.

Annual Fee?

  • The better the rewards, the more likely you will pay an annual fee.

Foreign Transaction Fee?

  • Much better to choose a card that will not charge this fee every time you use it outside of the U.S.


If you are unable to receive a credit card, consider the following 3 alternatives in order to qualify for a credit card:

  1. Open a SECURED CARD where you put money down and receive limited rewards while you show you are trustworthy with credit (i.e., pay your full balance each month).
  2. Become an authorized user of your parent’s credit card.
  3. Sign up for a credit builder loan. You pay back a loan into a savings account. Once loan is paid back, you have access to savings amount, which you can parlay into a secured credit card deposit.


Getting cash back from a credit card is a delightful experience. The money is often unexpected and unbudgeted.

It is usually fun to buy something fun with the money. But how fun it could be to be used by God to pass along this money to another person in need.

I personally have many stories of God placing someone in my path who needed the exact amount of money that I was prayerfully considering giving. It is a magical experience!


  1. The next time you get cash back from your credit card, consider this as something that is meant for another person.
  2. If you know that you will receive cash back sometime within the next couple of months, began to pray that the Holy Spirit will put someone in your path who needs that money.
  3. Be attentive to who may need the money and give as the Spirit leads!


Good credit is meant to be gained, but rarely used. Saving and investing are important tools that help us avoid actually using the good credit we have built up by avoiding consumer debt and paying our full credit card balance every month. But, what type of savings are appropriate, and how do you decide between saving and giving?

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