Debt has become a normal part of our American economic system. Perhaps too normal. As such, we Christians may be prone to gravitate to a worldly view of its use versus a biblical one. While debt has been normalized in our society, it is not necessarily normal from a biblical perspective.
There are many views and perspectives among Christians as to the use of debt. This article evaluates a few of the guiding principles of Scripture regarding the topic.
Biblical Warnings About Debt
Debt creates a form of bondage. If you have listened to The Dave Ramsey Show, you’ve no doubt heard him quote Proverbs 22:7 where Solomon writes, “ . . . the borrower is slave to the lender.” Slave is a word that evokes much emotion today, yet that is the picture Scripture paints regarding our use of debt.
Even though the context of Solomon’s day was obviously much different, it is hard to deny that debt creates a form of bondage. Furthermore, debt has been known to cause anxiety, high blood pressure, headaches, back pain, ulcers, depression, and a host of relational problems.
Debt creates a potentially dangerous situation. Is it a sin to play around with a rattlesnake? No, it is not a sin; however, you better know what you’re doing when you play with one. You better not get careless, become flippant, fail to respect it, or not pay attention to it, else it will be disastrous. So it is with debt. While borrowing is permitted in Scripture, there are many warnings about its dangers.
Debt creates a serious obligation. Believers taking on debt have a biblical and moral obligation to do everything in their power to repay it (Psalm 37:21). Moreover, Solomon warns that co-signing a loan creates such a serious obligation that it is foolish (Proverbs 11:15).
Debt creates a conundrum. While the Bible does not say it is wrong to borrow, it does warn against presuming upon the future (James 4:13-15). Hasty use of debt also may deny God an opportunity to provide (Philippians 4:19).
After reading these warnings, you may be led to think Christians should never use debt. Yet the Bible does not forbid its practice or consider it a sin. When evaluating its use, perhaps a good question to consider is not whether it is right or wrong, but is it wise or unwise?
Criteria When Using Debt
In his book Never Enough, Ron Blue shares four criteria to consider when using debt:
- Economic Criteria – Is the economic return greater than the economic cost? If the item purchased will likely increase in value in the future, it meets the criteria. Real estate, for example, will likely increase while a car will decrease in value. Thus, purchasing a house for example meets the criteria, as it will likely appreciate after purchase. A car on the other hand does not meet the criteria as it will depreciate after purchase.
Is there a guaranteed way of repayment? If you purchase a house with a 20% down payment, you should be in a position to guarantee its repayment. In a worst-case scenario where the asset had to be sold, you would likely be able to sell the property at 80% of its value. This principle is why highly leveraged debt is unwise. It would not meet the criteria.
2. Psychological Criteria – You and your spouse are free from anxiety and unified about the decision.
3. Spiritual Criteria – There is a spiritual peace of mind and the decision does not violate biblical principles. Any use of debt should be preceded with prayer, and you should only take action as you feel the Holy Spirit guiding and granting peace in the decision.
4. Emergency Criteria – The debt provides a solution for goals and objectives that can’t be met any other way.
Even if your use of debt meets all of these criteria, you should handle debt with care and maintain sufficient financial margin. Further, you must ensure the debt does not in any way restrict your service to God or facilitate sin. If you are purchasing things you cannot afford for selfish reasons, you’re not being a good steward and will not glorify God in the process.
Blue, Ron & Guess, Karen (2017). Never Enough: Three Keys to Financial Contentment. Nashville: B&H Publishing Group.
Burkett, Larry (1994). Debt Free Living: How to Get Out of Debt and Stay Out. Chicago: Moody Press.
Ramsey, Dave (2003). Financial Peace Revisited. New York: The Penguin Group.
Stroud, Emily (2015). Faithful Finance: 10 Secrets to Move from Fearful Insecurity to Confident Control. Grand Rapids: Zondervan.
Adapted from The Complete Guide to Faith-Based Family Finances by Ron Blue. Copyright © 2008, Ron Blue. Used by permission.
Copyright © 2020 by Steve Crawley @ Ministers Resource Services.. Used with permission. No part of this article may be reproduced or reprinted without permission in writing from Lifeword.org.