Is debt bad?

In Christian circles, opinions about debt vary. Some insist that it’s always detrimental and should be avoided. Others may even contend that it’s sinful for Christians to be in debt. But what does the Bible say about debt?

Scripture makes no such judgments about debt or even the one who owes it.

The wicked person borrows and does not repay, but the righteous one is gracious and giving. Psalm 37:21 (CSB)

According to the Psalmist, the borrower is reckoned as wicked because of the deliberate choice not to repay the debt — not simply because he or she owed it.

As a positive, debt can be used strategically to invest in opportunities for personal growth and financial stability. Here are some examples of positive debt when used wisely:

• Taking out a student loan to earn a degree or receive training could increase your future earnings potential or career opportunities. Just remember that some degrees may not always result in higher-paying positions, making it difficult to justify the cost of education relative to the income generated.
• Securing a mortgage allows you to own a home, earning equity over time.
• Handling a credit card responsibly by paying off your balance on time can build your credit score, which could be crucial for future financial opportunities and make you eligible for lower interest rates for other needed loans (such as a mortgage or auto).

However, one thing Scripture makes clear is that debt is not something that one should enter into lightly. The rich rule over the poor, and the borrower is a slave to the lender. Proverbs 22:7 (CSB) Debt obligates the borrower to the lender. As Christians, our primary obligation is to the Lord, and as Jesus warns us, we can't “serve two masters” Matthew 6:24 (CSB).

Accumulating too much debt or not wisely managing your payments can have negative consequences. In those instances, debt can become your “master.” Below are six ways that mishandled debt can take control of your life.

1. Increased Personal and Financial Stress

Debt can lead to significant stress if the payments become difficult to manage. This stress can affect your mental health, spiritual well-being and relationships. Financial issues can be a source of tension in your relationships with your spouse and family. Disagreements over money management can strain marriages, especially if one spouse is more affected by the stress of debt than the other.

2. Reduced Flexibility in Your Finances and Life

Too many debt payments (or just a few large payments) can make it harder to pay bills, build a reserve for emergencies, save for retirement or take advantage of new opportunities. Keeping up with your payments may require sacrifices in your family’s daily life, such as reducing outlays for fun activities, delaying vacations or cutting back on other things contributing to the quality of life.

3. Fewer Opportunities for Giving and Ministry

Managing a heavy debt burden can curtail your freedom to give generously to support the Lord’s work. Additionally, it can limit your availability for ministry and serving opportunities as you race to make ends meet every month.

4. Delayed Future Goals The need to prioritize debt repayment can force you to make challenging career, ministry or family choices. A high level of debt may require that you delay or alter your plans to buy a home, take a new job or ministry opportunity, or even start a family. Also, remember that saving for retirement early in your career is essential. Making your payments could reduce your ability to save, leading to delays in building your retirement account, which can have significant long-term consequences. 5. A Cycle of Growing Debt

The interest on unpaid debt can cause the total amount you owe to grow significantly over time, making it harder to pay off the principal. Too much could lock you in a cycle of ever-increasing debt.

6. A Lower Credit Score

Accumulating too much debt or missing payments can negatively impact your credit score. A lower score could result in higher interest rates or make it more difficult to obtain loans that you might need for a home, car or education.

So, is debt bad? No, but it is powerful. When used carefully, it can be a helpful tool to reach some of your financial goals. When deciding whether to take on debt — whether it’s an auto loan, student loan or the use of a simple credit card — be sure that you understand the long-term implications of any financial commitments you make and always balance your borrowing with your ability to repay. Looking for more help? Check out our helpful resources and calculators. Also, browse and watch our webinars for tips on money management and good financial stewardship for additional guidance in handling your financial resources wisely.

At GuideStone®, we want every servant of Christ to finish well. Our mission is to enhance the financial security and resilience of those who serve the Lord.

For more information, contact us at Info@GuideStone.org or 1-888-98-GUIDE (1-888-984-8433) Monday through Friday, 7 a.m. to 6 p.m. CT, to speak with a customer solutions specialist.

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