We’ve all heard about the dangers of credit cards. We all know someone (or are someone) who has gotten in debt a little too deep because of them.  Most debt counselor’s advice is to simply quit using them or cut them up and pay off the balance. Then when you’re out of debt, and can use credit responsibly, you can have your cards back. But my question is; when is it responsible to use credit? Most financial advisors, both Christian and non-Christian seem to agree that credit is a tool and when used responsibly it can help to increase your net worth. But that doesn’t seem to be working for most people. In fact, I think it’s clear that credit has financially bankrupted more people than it has helped.

I think that one of the major problems is that unlike other tools that we use, most people are not taught how to use credit wisely. Sure parents tell their children to beware the dangers of credit cards and warn them about instant gratification but they never teach them what situations it is ok to use credit in. There are plenty of thumb rules that attempt to answer this questions such as, “only use credit cards in an emergency”, or “credit is only ok to use if you’re buying something that will increase in value”. Unfortunately, these are only thumb rules, and pretty unstable at that. What constitutes an emergency? Does someone have to be at risk of losing a limb or is it ok to use financing if the sale on the TV that you really wanted is going to end soon. And how do you know if what you’re buying is going to increase in value? Over the last year we saw foreclosures across the country and people walking away from their houses because they owed more than the house was worth. Were their mortgages a good use of credit?

We see credit or debt discussed several times in the bible. But what we as Christians often forget, is that there are two sides to credit. There is a borrower, and a lender. Our lifestyles and roles as consumers have trained us to be borrowers without reminding us what a blessing it is to be a lender. I don’t mean to be a lender for profit, the way the banks and credit card companies do. But to be a lender to someone in need. Remember that God told Israel that he would bless them and make them lenders to many nations and borrowers from none (Deuteronomy 15:6). How can we reach out to those in need if everything we own is already owned by someone else? The purpose of credit is not to allow us to purchase what we want or when we want it. For Christians, the purpose of credit is to serve as a way to help others. We should be the lenders, not the borrowers. God desires us trust him for our needs and to be lenders or even givers to others in need (Matt 5:42; 6:31-32).

So, I would say that “yes”, credit is a tool. But not a tool like a hammer with which you may bruise your finger if you make a mistake. But more like a chainsaw, in the sense that if you use it incorrectly you may never recover. The sad part is, most people are holding it on the wrong end and will end up hurting themselves.

Supporting Verses about Debt

Others were saying, “We are mortgaging our fields, our vineyards and our homes to get grain during the famine.” Still others were saying, “We have had to borrow Money to pay the king’s tax on our fields and vineyards… We have to subject our sons and daughters to slavery. Some of our daughters have already been enslaved, but we are powerless, because our fields and our vineyards belong to others.”

- Nehemiah 5:3-5

A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.

-Proverbs 17:18

Give to the one who asks you, and do not turn away from the one who wants to borrow from you.

-Matthew 5:42

Do not be a man who strikes hands in pledge or puts up security for debts;

If you lack the means to pay, your very bed will be snatched from under you.

-Proverbs 22:26-27

The wicked borrow and do not repay, but the righteous give generously;

-Psalms 37:21

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

-Proverbs 22:7

Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.

-Romans 13:8

Recently, the Los Angeles Times published a story about the 4 new pennies being released this year in honor of Abraham Lincolns 200th birthday. In the article it mentions;

given the rising price of zinc and copper, it costs about 1.4 cents to make a penny

This raises the question, why do we even continue to make the penny. According to the Wall Street Journal, until around 1999 it had cost about 9/10 of a cent to make a penny. That comes out to about $400 million of profit or seigniorage as the Mint likes to call it.

With numbers like these, it was understandable why we were using the nations zinc and copper to produce a coin that most people don’t even keep track of. But now, with the creation of pennies costing us around $1.6 billion to mint each year (above what they are worth), what is the point of keeping them around? The world would function just fine without them.

Several people have suggested that it would be more difficult to buy with cash without using the penny but I don’t think that would be so. The final price of a product, tax included, would be figured as usual then rounded up or down to the nearest $.05. With the use of credit/debit card for purchases, most things are paid for without cash anyways. And when you consider the fact that gasoline is priced to the tenth of a cent and pretty much anything incurring interest deals in fractions of a penny and everything works out fine, I can’t see any reason to keep it around. Heck, it might even be better to round to the nearest $.10 and get rid of the nickel as well. Then we could use the metal to mint $1 and $5 coins that would stay in circulation for 30 to 40 years instead of paper bills which only last 13 – 18 months.

If anyone knows somthing that I don’t, please let me know. I’m sure there are other factors but I also know that we would not be the first country to do this. Several European countries have eliminated their $.01 (and in some cases thier $.02) pieces and just operate as I’ve explained above.

There has been a lot of debate over the last few months on whether the new stimulus package is necessary or even moral. One of the biggest objections that I have heard is that people don’t want the government spending “their money” (that the government collected through taxes) on things that they don’t believe in or support. I fully understand this point of view and being fairly conservative would appreciate the government letting me support my own causes with the money I earn. But I was reading the Gospel of Matthew the other day and came upon chapter 22 where the Pharisees tried to trap Jesus in his words by asking if it was right to pay taxes to Cesar or not.

But Jesus, knowing their evil intent, said, “You hypocrites, why are you trying to trap me? Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose portrait is this? And whose inscription?” “Caesar’s,” they replied. Then he said to them, “Give to Caesar what is Caesar’s, and to God what is God’s” (Mathew 22:18-21)

It reminded me again how little ownership we really have. As stewards, we understand that the possessions, talents, and gifts that we have are all given to us by God to manage. But we forget that the money we use on a daily basis is minted and given value by the government. In fact, according to Matthew 22, the government owns the money that we use every day. Now this obviously does not supersede Gods ownership of everything on earth but it does show us that the money that the government collects for taxes was never our money to begin with. Just as we are to give to the Lord from our first fruits, what is already his, Jesus tells us that we are to give to Caesar what is Caesars. It doesn’t matter if we agree with what the Government is doing with the money because it is theirs to do what they want with. The stewards that are in charge of it, will be judged accordingly just like in the parable of the talents. God will not hold us responsible for what is done with the taxes collected.

So while we may agree or disagree with the way the Government is spending tax dollars, we have to remember that it was never ours to begin with. We are fortunate enough to live in a time where we can choose who will be in charge of spending our money but that is the extent of our tax accountability. If there are any other opinions out there I would be glad to hear them.

This is a video that I was emailed a few months ago. It gives some good insights into what money really is, how the banking system works, and the direction that our economy is headed. While I don’t agree completely with all of the conclusions given toward the end of the video, the information used to get there is pretty factual and has been laid out very simply.

The video is about 47 minutes long but I recommend watching it strait through at least once. I’ve seen it probably a dozen times and I still find something new in it each time I see it.

I would appreciate your comments and opinions when your finished.

Enjoy…

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

                                                                   -Preamble of the U.S. Constitution

 I had a discussion recently about the Obama stimulus bill that is currently awaiting approval in the U.S. Senate. While there is a lot of debate about whether this bill will truly stimulate the economy the way that it was originally intended to, I believe there is a more moral issue with the bill.  You can read in the preamble of the U.S. Constitution that our founding fathers were not establishing America solely for their own prosperity, but for their posterity, meaning their descendents. Much of their comfort was sacrificed in this process. It brought war onto American soil, took fathers and sons away from their families, many not to return, and essentially stopped trade into and out of the colonies, thus damaging their economy. But this was the price that Americans paid to ensure that the freedom that the founding fathers had dreamed of was able to be passed on to their children and grandchildren. In fact, it was so important to them that when the constitution was written, they included their descendants in the reason for its drafting.

Today, over two hundred years later, we have become the most prosperous country in the history of the world. We have the fastest growing economy, one of the strongest militaries, and the income level at our poverty line is in the top 15% of the world richest people¹ .  Now we are in the middle of what the media is calling an economic crisis and are considering passing a stimulus package that we believe will help pull us out. Without debating the effectiveness of the bill, we have to ask; is this what America has become about? This bill will allow the printing of hundreds of billions of dollars and put America into unimaginable debt. This debt will not be paid off in our lifetime but will pass on to our children and to their children.  Have we become so spoiled that we are willing to mortgage our children’s future because we can’t afford cable television or a new cell phone?  We have become so comfortable in our lifestyle that surviving on unemployment or having to drive an older paid-off car has become an economic crisis.

Our forefathers were willing to weather the storm and endure the hardships so that we might have a chance at the prosperity that we now have.  Is it really worth indebting our children so that our generation can remain as prosperous as we are? Or is it time to weather our own storm to ensure that our posterity is born with the same opportunities that we were given? 

¹Based on single person income of $10,400, according to www.GlobalRichList.com