What Does the Bible Say About Debt?

If you are like millions of others around the world, you have debts. Perhaps it is in the form of a mortgage or a car payment. For many parents, it is in the form of college tuition for their children. Debt seems almost impossible to avoid.

What is the True Problem?

It is nearly impossible to get along in our post-modern world without putting yourself in debt. The fact of the matter is, unless your credit score reflects that you have gone into debt in the past, you simply cannot be approved for credit now. Everyone must go into debt in order to go deeper in debt, as odd as that sounds. 

The system itself is rigged to only encourage debt. For example, if you pay your cell phone on time every month, that doesn't get reported to any credit agency. However, if you fail to pay your cell phone bill, that does indeed get reported to credit agencies. Current statistics on debt in American demonstrate the following:

  • Eighty percent of Americans have consumer debt. This amounts to $14 trillion in debt, collectively. Mortgages count for the bulk of this debt, at $9.44 trillion. The average mortgage is $190,000. Not counting mortgage debt, the average consumer debt is $38,000.
  • The greatest amount of debt is held by those between the ages of 45 and 54. Thirteen percent of the population will be in debt their entire lives. Medical debt has increased by 33%. The average cost of medical care per year, per person, is $5,000. Raising a child to the age of 18 costs an average of $250,000.
  • Two out of every 10 people use their paycheck to pay debts. Nearly 50% of Americans literally survive paycheck to paycheck. Nineteen percent of people have no emergency funds saved back. One in three Americans has taken the time to sit down and make a budget. Student loan debt averages $46,822 per home.
  • Twenty-eight percent of these default on their student loans. Auto loan debt averages $27,804 per home. Credit card debt averages $5,135 per home. People under 35 years of age average $67,400 of debt. Fifteen percent hold an average of $10,000 of medical debt.
These numbers are staggering. What emerges from a clear understanding of these statistics is that most people are living beyond their financial means, either due to necessity or irresponsibility. 

As our economy continues to struggle, this debt will only increase, and finances become more and more unstable. Why? Our federal government is also irresponsible with spending, borrowing from nations like China to pay old debts, and continually raising the debt limit to pay debt and increasing spending on more programs that simply add to the weight of debt. At some point, the whole house of cards will come crashing down, since you cannot print money out of thin air to solve the spending problem.

The more a nation does so, the less value that currency has. Eventually, you find yourself in a Venezuela situation, where a wheelbarrow full of cash might purchase you a loaf of bread if there is any bread to be purchased at all. Debt is indeed a serious problem.

“Some people are just stuck in their ways and have been brainwashed into believing that credit cards and debt are an unavoidable part of life” (Dave Ramsey). 

Debt can be avoided in most cases, so let's see what Scripture has to say. 

What Does Sacred Scripture Say?

Scripture has quite a lot to say about debt. As a Christian, it is important that you have a basic grasp of this perspective since you want to form your financial approach on its tenets. Let's take a brief look, shall we?

1. Scripture says not to owe anyone, and that the one who does becomes a slave to the lender (Romans 13:8; Proverbs 22:7).

2. Do not become a guarantor of any loan (Proverbs 22:26-27; Proverbs 11:15).

3. Be content to live within your means (Philippians 4:11-13).

These three seemingly simple principles alone are extremely difficult to live by, considering our culture today is so filled with material things that either make our lives easier or simply appeal to our hobbies and vanity, but almost always demand a significant investment that requires us to go into debt. And this often leads to an inability to pay those debts back, which is a violation of scriptural principles we should live by. For example, Psalm 37:21 makes it clear that only the wicked person fails to pay back what they owe. How many Christians have allowed themselves to fall so far into debt that they have defaulted on loans? We can reasonably assume a lot, considering the statistics. Those who do are guilty of sin in doing so, and likely do not even realize it. Now, I am not suggesting that all debt is morally or ethically wrong. I recognize that some debt will be unavoidable. For example, unforeseen events such as a fire in our home, automotive breakdown, medical emergencies, unexpected loss of income or employment, can all lead to significant and unavoidable debt. The point here is, we need to be very careful about how much debt we allow ourselves to accumulate and for what purpose. If it is merely for vanity's sake, that is, you want that new red sports car you saw at the dealership, but you really cannot afford, then it is indeed unwise and even sinful to accrue. If it is the latest trend in women's fashion and you want to buy the entire line of outfits because you do not want people to think you are unfashionable, you are entering into debt sinfully. However, if it is for an objectively good purpose (an emergency medical treatment, your house burned down and are now in need of housing, etc.), then you approach it cautiously and in extreme moderation, only taking on what you know you can pay back in the time allotted. I realize these biblical guidelines are very strict, and even perhaps more difficult than ever to live by in the modern world, but if we want to remain faithful to the whole counsel of the Lord (Acts 20:27), then we must do our absolute best to apply these principles as consistently as we possibly can, avoiding deviations at all costs. When you do so, you will very likely find that you can reasonably save money for those difficult times that arise in life, secure your financial future after retirement or, in some cases, illness or injury that puts you out of work permanently and maybe even have enough money left after all of your financial responsibilities have been met to take a vacation or help someone else who is struggling to make ends meet.

In Summation

Be wise and discerning and understand that the Adversary attacks us on many fronts. In our modern world, one of the most effective means of attack is financial since bad finances can ruin marriages, break up families, and even lead to alcoholism, drug abuse, and self-harm. Be wise. Live by the counsel of God's Word.