cool article.. I wish I belonged to this Church

Financial Salvation
Church Congregation Delivers Itself From Debt



June 19 — It's no surprise when a joyous revival service at Mount Carmel Baptist church in Norfolk, Va., "saves" somebody — but being saved in this congregation is not necessarily what you think.






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Family by family, the congregants at Mount Carmel are being rescued from debt. Bishop C. Vernie Russell helps his congregants achieve financial salvation, as well as the more traditional sort.
"They couldn't serve their master when they were busy serving MasterCard," Russell said.

Amid the foot-stomping, music and song at Russell's monthly "debt liquidation revivals," the congregants are raising money that is used to pay off other church members' credit debt obligations. Set free from debt, worshippers can start fresh, help others who are still stuck in debt, and even tithe to the church again by devoting 10 percent of their salary to the church. Thus far, the congregation has wiped out more than $320,000 in debt.

A Burden Lifted

At a recent revival, Russell called out the names of one of the couples. He never chooses people before arriving at church, and says he has no particular criteria for whomever he picks.

The beneficiaries were a young couple named Carla and Shedrick McLaurin, who owed creditors $19,000 after years of buying above their ability to pay. The congregation lines up to donate money and checks, the deacons add up the contributions, and suddenly, the burden is lifted.

The McLaurins receive the funds immediately — but they do not get out of debt completely scot-free. As part of the church's arrangement, they are required to attend seminars so that they can stay financially healthy and debt-free. Plus, they are asked to attend subsequent revivals and contribute at least $300 to help other families. But it seems to be a small price to pay for those who have benefited.

"Nineteen thousand, I'm so happy," McLaurin exclaimed after the service.

Russell, who started the revivals 14 months ago, believes that in a year, all 3,000 church members will have their debts paid off.

"What you saw tonight is what goes on every night we have it," he said.

The service was a vivid showcase that reminds everyone how to handle debt, what credit mistakes to avoid, how to make sure you're never in the McLaurins' situation and what you can do if it happens.

Costs of Frivolous Spending

Deborah Copeland and her family were recently in the same situation.

"It was such a burden," Copeland recalled. "It was so heavy."

It was also so easy to reach for a credit card instead of cash to buy the items she wanted.

"I love to shop," Copeland said. "And basically, it was clothing, items we really didn't, really didn't need. You saw them, you wanted them, and it was a quick way to get them."

Copeland and her husband Robert were making minimum payments on their credit cards, and falling further and further into debt.

Russell says the same thing that credit counselors say: Stop the frivolous spending and cut up those credit cards. In fact, he takes scissors to people's plastic during the revival.

"There's got to be one more person out there holding on to that credit card," he calls out to the congregation. "Anybody out there with a credit card, come on down."

Not surprisingly, the bishop's revivals have not made him very popular with credit card companies.

"Oh, they don't like me at all," Russell said, with a grin. "They really don't, and I think we have over 1,000 cards cut up. My people say when they call to close the account, the credit card people are telling them well, we can reduce your interest rate, and they say 'no.'"

For those who have benefited from the revivals, the relief is overwhelming.

"I just feel so free tonight," McLaurin said, crying. "We probably would have been in debt for the rest of our lives, and we're only 24 years old. Being debt-free is a blessing."

Escaping Credit Card Debt


June 19 — At the end of the first quarter of 2002, Americans had amassed approximately $600 billion in credit card debt.
The only way to avoid paying for yesterday's frivolities tomorrow is a plan: cut the cards, lower your rates, and pay the debt off.

Quit While You're Behind: The average cardholder owns a whopping eight credit cards, but no one needs that many cards. The first step to taking control of your debt is throwing out the excess plastic in your wallet. Fewer cards means less opportunity to spend. Remember, most people do not amass debt by purchasing one big-ticket item they cannot afford. More often, the culprit is all the insidious little purchases that add up to one big debt. Stop the frivolous spending and start paying for things with cash. You will be amazed how frugal you become. A deep breath and a pair of scissors is all you need to cut up those credit cards, control the spending and reclaim your financial future.

Use the Magic Word One way to lower your credit card's interest rate is to ask. Credit card companies are much more negotiable than you would imagine. They want to keep your business, and they know the credit card industry mailed out a stunning 5 million solicitations last year. That means the average household received more than one credit card offer per week. In order to keep you from transferring your balance to a competitor, your credit card company may lower your rate if you call and make a request. Depending on the balance you carry, even a modest drop in interest could save you hundreds of dollars a year. (Check out our credit calculaters in the Related stories column on the left side of this page to do your own credit calculations.)

Minimum Payments Can Cause Maximum Pain: Paying off your credit card debt can be summed up easily: Earn more than you spend. If you make sacrifices to live below your means and allot your savings towards your debt, you will slowly and steadily work your way out.

Do not get sucked into the futile cycle of paying only the minimum amount required. Minimum payments are a trap. If you make only the minimum payment you are only paying the interest on your balance. To reduce your debt, you need to start chipping away at the principal. The average credit card debt for households with at least one card is $8,367. Assuming an interest rate of 18 percent, if you make just the minimum payment, this will take more than 30 years to pay off the debt, and you will pay over $12,000 in interest alone. As a general rule, I suggest you triple the minimum payment to get out of debt.

Mellody Hobson, president of Ariel Capital Management in Chicago, is GoodMorning America's personal finance expert. Click here to visit her Web site, Ariel Mutual Funds.com. Ariel's Director of Corporate Communications Anne Roche contributed to this report.