Sitting in a front pew, Dawn McMichael fanned out three credit cards - J.C. Penney, Fashion Bug, and her beloved Lord & Taylor. A church elder offered a pair of scissors, but the 53-year-old woman had brought her own red-handled implement from home.

McMichael, who was laid off last year, held up the cards and got to work.

Cut. Chop. Hack.

"This is the painful moment," she said, only half joking as Lord & Taylor was cleaved apart.

Up and down the rows of the Malvern Bible Chapel, more than 50 congregants erupted in cheers, whistles, and applause. Dawn and husband John McMichael, who live in Downingtown, had taken one more step on the path to debt-free existence.

As layoffs and economic worries persist, churches, synagogues, and other houses of worship have expanded their missions to address a most earthly concern: money. These days, the place for spiritual nurture also hands out financial guidance.

Over 13 weeks, participants in the Bible Chapel program paid off mortgages, rethought purchases that involved loans, held yard sales to pay down debt, established emergency cash funds, and cut up a mason jar's worth of plastic.

"It's seeking to change behavior," said Joe Tirrell, a church elder. "It's a lot like an AA program."

Even as the faith-based programs teach new habits - how to make a budget and save for college and retirement - they also inculcate ways to live out religious values that include good stewardship and compassion.

Theologians say they welcome programs that cater to congregants' needs, whatever they are. At the same time, some caution that talking money and scripture - especially if the complexity of the financial system is overlooked - could come off as "prosperity gospel," which teaches that God rewards the truly faithful with wealth.

If finances fail to improve, then a congregant "could experience guilt for not being a 'better person,' " said Jim Caccamo, an assistant professor of theology at St. Joseph's University.

Such concerns aside, many religious communities say financial seminars are a necessary product of the times.

"We want to be there to meet the need of our community," said Elisa Heisman, program director at Congregation Beth Or in Maple Glen, Montgomery County. "If they're in trouble, we want to offer them resources."

The synagogue has a new program: Jewish Business Women Network. It meets monthly and hosts speakers on subjects that include the job hunt and connections through social media. "I've had this job for six years," Heisman said, "and this is the first year I've run anything to do with the economy."

Like many congregations, the Bible Chapel has seen layoffs among its members and more calls for help since the economy turned sour.

"It's a huge need," Tirrell said. This year for the first time, it sponsored Dave Ramsey's Financial Peace University, a national video program from Brentwood, Tenn., that promises to help participants get out of debt and prosper.

As the economy has worsened, more churches have bought the $300 curriculum based on biblical principles that Ramsey, an author and syndicated radio talk-show host, developed, said Ken Munday, a Financial Peace adviser and team leader. (Families pay only for workbooks, which amount to about $100.)

In the first four months of last year, about 5,600 groups, the vast majority of them churches, offered the program. During that same period this year, the number grew by 40 percent to 7,800 groups, which includes dozens of Philadelphia-area churches, figures show.

"I do believe a lot of our financial problems are because we have really strayed from the common teachings of different religious groups," Tirrell said. "They all teach responsibility."

At Or Hadash, a Reconstructionist Congregation in Fort Washington, Rabbi Joshua Waxman organized a Friday Shabbat service in February that focused on money and values and included a speaker from Jewish Funds for Justice in New York City.

The synagogue also held a resource fair, added a job bank and hosted a session on how to talk to children about difficult financial decisions.

Or Hadash wants to legitimize conversations about fallout from the economy and "frame our response in the context of communal need," Waxman said. "Any difficulty any one individual in the congregation is having should concern all of us."

For many religious groups, financial-planning sessions might seem off mission. Traditionally, needs focus on pastoral counseling, ministry to the dying, or feeding the hungry, said Caccamo of St. Joe's.

"Yet people have many needs that don't fit traditional models, yet are profound," he said. "Financial planning is one of these."

Caccamo also said that "dealing with money issues beyond the 'please give us some' can help people see the connections between God, faith community, and the material goods of the world."

Covenant Fellowship Church in Glen Mills will offer its sixth session of Financial Peace in July, said Stefan Bomberger, a pastor there.

"The Bible really discourages debt," he said. "It describes debt as bondage." The course, Bomberger said, helped him and his wife wipe out $100,000 in debt from college and car loans. "We're committed to stewarding our finances."

A week ago yesterday at Malvern Bible Chapel, class began with testimonials.

"It's taken 13 weeks, and I've come closer to realizing I don't need to turn over my car every three years," one man said.

Over the weeks of the program, Bob Watt, 62, of West Caln Township, paid off his mortgage with an inheritance that he would have spent otherwise but for Financial Peace. Within a week, he lost his job, he told the congregation, so he was grateful to lose those monthly payments. "So we have peace," he said.

Many took pride in getting rid of credit cards. One man even dispatched five with the help of a guillotine-like chop of a paper cutter.

Not that old habits die easily. One woman who had rid herself of four credit cards confided she "kept the Talbots."

Then it was time for the final DVD, which features Ramsey. On this day, he spoke about unleashing the power of generosity and the importance, especially when debt-free, of readily giving to charities, including one's church.

"You and I are actually asset managers for the Lord," Ramsey said. "God owns it all."

Afterward, the McMichaels, who do not belong to the Bible Chapel but who attended as visitors, praised the lessons learned.

"I will never," Dawn McMichael said, "go out of my way to assume any new credit-card debt unless we can pay it off month to month.

"It's a hard transition," she allowed, adding that the temptation for ever more credit is everywhere. "It's painful. But we're doing it."

Contact staff writer Lini S. Kadaba at 215-854-5606 or Lkadaba@phillynews.com.