Biblical Finance 101: Stewardship Do's and Don'ts 3

As a continuation of The Do's and Don'ts of Stewardship, I would like to address some very important guidelines in the area of credit usage. Just about everyone uses credit, namely credit cards, for purchasing everything under the sun. Even though this practice has become the norm, Christians should make it the exception. Most Christians use credit without any preplanning, or rather, defined rules of usage to prevent abuse and going overboard.

As a guide, one should NEVER use credit unless funds are readily available to pay off the bill. Otherwise, uncontrollable "credit creep" may take place. Remember, "credit creep" is the systematic process of increasing debt service. In other words, every time a credit card is used, monthly payments get bigger, each time bringing financial bondage closer to reality. Proverbs 22:7 says, "The rich rules over the poor and the borrower becomes the lender's slave." Does this mean that all borrowers (debtors) are slaves to their lenders (creditors)? No! It is merely suggesting the potential consequences of being a debtor.

If one uses a credit card and is able to pay off the bill, but chooses not to, that's ok. However, if one lacks the financial resources to pay off the bill, that is a definite red flag for pending financial bondage. What qualifies as having adequate financial resources to pay off a credit charge - any savings or investment that is not earmarked or subject to penalty if liquidated. For example, a savings account qualifies, but only the portion that is not dedicated for some purpose. If there is $1,000 in savings, but $900 is committed to real estate taxes due in three months, then only $100 is available. IRAs and other retirement plans are disqualified because of penalty and tax consequences. There are many other examples, of which a little common sense will determine which ones fit.

The whole purpose of this is "debt coverage" - keeping spending within one's means to pay. Anything more circumvents God's promise of provision (Phil 4:19). Financial bondage is always the next thing to follow. As you plan your goals and strategies, don't forget to set forth guidelines on using credit.

Gary Ellis, MBA, CFP
Association Stewardship Director