Does using credit violate Biblical
teaching? Romans 13:8 says to owe nothing to
anyone. According to one Bible commentary, this means a person
should not continue to owe a debt if they are able to pay it,
unless there has been tacit (i.e., implied) consent by the
person to whom the debt is owed. If this is true, a
person who owes a debt is not disobeying Romans
13:8, if their credit payments are made on time.
Likewise, Psalm 37:21, which
says that a wicked (i.e., evil) person borrows and does not pay
back, appears to mean exactly what it says; i.e., generally
speaking, a person is wicked because they don’t repay what they
owe, not because they borrow.
Larry Burkett, a well known Christian writer and lecturer on
family financial matters, states on page 253 of his book
entitled The Complete Guide
to Managing Your Money that the Bible does not
teach that a person should never borrow, but it does
teach that unwise borrowing is hazardous.
Will using credit damage the reputation
of God? Philippians 4:19 tells us that God will
provide for all the needs of a
Christian. Some people believe that, if a Christian
depends on credit to help pay for their needs, other
people may get the impression that God is not providing for all
of the needs of that Christian.
On the other hand, it may be argued that
Christians who keep the terms of their credit agreements are
being honest in dealing with their creditors and, therefore,
their use of credit should not damage God’s reputation.
In any case, Larry Burkett has expressed the belief that
continual borrowing indicates a lack of faith in God.
He indicates on page 255 of his previously cited book that,
although borrowing is not a sin, dependence on credit
indicates that a Christian has not yielded completely to God.
[Dependence on credit can be defined as continuing heavy
reliance on borrowing. Thus, a person who pays the entire
balance on his (or her) credit card statement each month is
not dependent on credit.]
Does using credit limit God?
Matthew 6:31-33 (like Philippians 4:19, which was mentioned
with regard to the previous question) indicates that God will
take care of all of our needs, if we
will let Him do so. By using credit, we may not be allowing God
to take care of our needs.
In this
regard, Ron Blue, another prominent Christian writer and
lecturer on family financial matters, notes on page 62 of his
book entitled Master Your Money that,
rather than waiting for God to meet their needs, many
people prefer to attempt to do so their own way and according to
their own timing, whereas Isaiah 55:8-9 informs us, “‘For
My thoughts are not your thoughts, nor are your ways My ways,’
says the Lord. ‘For as the heavens are higher than the earth,
so are My ways higher than your ways, and My thoughts than your
thoughts.’“
Will using credit result in a form of
bondage? Proverbs 22:7b says, “[T]he borrower is servant
to the lender.” Although this may not always seem to be true, there
are certainly many borrowers who would say that they feel as if they
are in bondage as long as they continue to owe money to their
creditors.
Does using
credit presume upon the future?
James 4:13-15 cautions against assuming that we will
be able to do all the things we want to do in the future, which
seems to include being able to pay off our debts. Therefore, if we
use credit, we should have a definite source of repaying the entire
balance of all of our debts, regardless of what happens in the
future. The definite source of repayment may be any one or more of
the following:
-
Previous
savings
-
The value
of the asset against which you have borrowed, assuming that the
asset, unlike a car, does not depreciate in value faster than
the loan balance declines
-
Other
assets that are not encumbered with debt
-
Credit
insurance, but it is generally very expensive
-
Life
insurance, although it is beneficial only if you die or otherwise
terminate the policy
As a result of the preceding information, you
may want to give serious consideration to four guidelines
recommended by Ron Blue, which suggest a strict approach to deciding
whether or not to undertake debt.
1. Incur a debt only if it makes economic
sense, based on the two following criteria:
-
The cost to borrow
(i.e., the
after-tax cost of the interest that you pay) must
be less than the economic benefit you expect to
receive. (The economic benefit is the income earned and/or the
growth in value of the item being purchased.) Relatively few
situations involving the use of credit would qualify under this
criterion.
Consider the following example. Assume that a person is
contemplating using credit that will result in an average annual
before-tax interest cost of $1,000. Assume also that the interest
is fully tax deductible and that the person has a combined federal
and state income tax rate of 30%. Thus, the average annual
after-tax interest cost for that person will be $700. To justify
using credit in this situation, the economic benefit will need to
exceed $700 per year after income taxes.
2. Both spouses must be free from any anxiety
regarding the debt
3. Both spouses must have spiritual peace of
mind regarding the debt.
4. Both spouses must decide if the personal
goal they expect to achieve by incurring the debt can be met in no
other way (i.e., is there not a better alternative?).
And, one thing more: Be sure to pray before
you make any decisions regarding your use of credit. Pray
sincerely for wisdom and self-discipline in these
matters. James 1:5 says, “If any of you lacks wisdom, let
him ask of God, who gives to all liberally and without reproach
[i.e., rebuke or disapproval], and it will be given to him.” And
Luke 11:9 tells us, “[A]sk, and it will be given to you; seek,
and you will find; knock, and it will be opened to you.” |