Is Debt Ever a Good Idea Biblically Speaking?

Debt is a national problem on so many levels. There are lots of opinions on debt.

Is Debt Ever a Good Idea Biblically Speaking?

Debt is a national problem on so many levels. There are lots of opinions on debt. Dave Ramsey says no to debt in any form and goes on to say that credit scores don't matter. I couldn't disagree more. First, I think that there is a difference between using credit wisely and bad debt. Second, we are in a credit/finance based society and your credit score matters in situations beyond whether or not you take out a credit card.

More importantly, how do we deal with debt Biblically speaking? First, no where in the Bible does it say that debt is a sin. Now, there are quite a few versus that give instruction on debt. I go to Proverbs 22:7 as the main instruction on how debt works in a Christian's life.

The rich rule over the poor, and the borrower is slave to the lender.

I focus in on the word "slave". There is good use of money by using credit and their is debt that causes you to be a slave to the lender. The word slave indicates the problem debt creates. Debt limits your freedom to serve God and be in relationship with Him because you are having to constantly make sure that the debt payment is made as well as provide for that payment. That limits your time and your resources to go where He wants. It also can limit your mental energy. The goal is to live a life without limits.

That is slavery and not freedom. You are indebted to another.

Prudent use of credit is defined as a good financial move that does not limit your freedom in any way. Sure, there is a payment. However, the payment makes sense and does not make you a slave in anyway. It remains credit rather than turning into indebtedness. Said another way, nothing changes because you took on that payment and you have a sound financial/business strategy for using credit and paying it off.

What about the individual who is maxed out and using credit to survive? At some point you have to be realistic and stop the bleeding. Be intentional about getting out of debt once and for all. That means putting a solid game plan in place and intentionally following it using prayer as your guide.

When considering credit, use the litmus test of slavery vs freedom. That settles the issue in my mind. Plus, of course, pray for a peaceful answer to the question am I using credit or creating debt and never move forward without the Peace of God.

"When considering credit, use the litmus test of slavery vs freedom." That's a great statement to boil it down!

I agree with you 100%, But, the majority of bankruptcies filed are due to medical expenses and not frivolous spending , though the negative result is the same. Medical debt for a loved one would be the exception to the rule these days though definitely an indicator of the sad state of affairs.

My personal policy is, "if I can't pay cash then I can't afford it." Recently our car crapped out and it was going to cost more to fix it than what it was worth. Fortunately we had paid cash for that vehicle several years ago so we didn't owe any money on it. We make it a policy to put as much in savings as we can for emergencies. So, we were able to pay cash for a brand new 2017 vehicle. Now, it's not a Lexus or BMW but it is paid for! We use credit cards to pay for almost everything with the understanding that when that monthly bill comes we pay it off in full. Our credit rating was 817 the last time I checked. I think debt is okay if you are strategic about it, i.e., if you get a loan for $5000 at 3% interest and you can put that same loan amount ($5000) in a vehicle that will gain more than 3% interest then you are getting the money interest free. I don't think you can get a loan on anything but a house for 3% interest, but some vehicle manufacturers run specials for around 2.5 - 3% interest. So, if you have $20,000 plus in the bank and the car costs $20,000 it might make sense to take the manufacturer's deal at 2.5-3% and put that $20,000 in an investment vehicle that will net you at least 2.5-3% and keep it there until the load is paid off. Another option would be to put that money in an investment vehicle that pays dividends that are equal to your monthly car payment and let the dividends on your investment pay for your car. But I am not a fan of debt at all.

@jmarkb - Not being a fan.... It can be a dangerous game. Even the best laid plans can go south and credit turns to debt! Sounds like you are living within your means. That is a great accomplishment!

Yes, I think that is the key - to live within your means. In so doing you can tithe and give gifts and offerings and use your wealth to advance the Kingdom. My wife and I laugh when we give a tithe or offering and joke that, "well there goes our Mercedes, or there goes that exotic vacation." We could afford those things but we choose not to spend our money on them in order to be able to pour into the Kingdom.