Is debt bad?

Debt often has a negative reputation, but is it bad? In Christian circles, opinions about it vary widely. Some may believe that debt should be avoided at all costs, while others may even contend that it’s sinful. Debt is closely connected to other significant themes in the Bible — such as money and stewardship — and understanding it requires thoughtful application of Scripture’s timeless truths to our present context. As a starting point, what does the Bible say about debt? Below are a few verses that speak directly to debt, along with some initial reflections.

What the Bible Says About Debt

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 choice not to repay the debt, not simply because he or she owed it.

This Scripture does not condemn debt outright, nor label borrowers as sinful.

When Debt Can Be Helpful

When used wisely, debt can be a strategic tool for personal growth and financial stability:

• Taking out a student loan to earn a degree or receive training could increase your future earnings potential or career opportunities. Just remember that not all degrees result in high-paying positions, making it difficult to justify the cost of education in relation 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).

Six Dangers of Mismanaged Debt

The rich rule over the poor, and the borrower is a slave to the lender. Proverbs 22:7 (CSB)

This Scripture illustrates that debt is not something that one should enter into lightly.

Debt obligates the borrower to the lender, and as Christians, our primary obligation is to the Lord. As Jesus warns us in Matthew 6:24, we can’t “serve two masters”.

Below are six ways that mishandled debt can negatively impact our lives:

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 even your relationships.

2. Reduced Flexibility in Your Finances and Life

   Large or multiple debt payments can limit your ability to pay bills, build a reserve for emergencies or enjoy activities like vacation that contribute to the quality of life.

3. Fewer Opportunities for Giving and Ministry

   Managing a heavy debt burden can restrict your freedom to give generously and reduce your time for ministry and serving as you race to make ends meet every month.

4. Delayed Future Goals

   The need to prioritize debt repayment can force you to delay or alter your plans to buy a home, take a new job or ministry opportunity, or even start a family. 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

   Too much debt or missed payments can hurt your credit score, resulting in higher interest rates or greater difficulty in obtaining loans that you might need for a home, car or education.

Make Wise Borrowing Decisions

So, is debt bad? Not always. 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 credit card — it is important to pray, seek wise counsel, and reflect on the long-term implications of any financial commitments you make and balance your borrowing with your ability to repay.

Looking for more help? Check out our helpful resources and calculators. For additional guidance, browse and watch our webinars for tips on money management and good financial stewardship.

At GuideStone^®, we want every servant of Christ to finish well. Our mission is to enhance financial security and resilience for 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.

The information in this article is for educational purposes only and is provided with the understanding that GuideStone is not rendering legal, financial or tax advice. We encourage you to consult with appropriate counsel and other advisors on all of your unique financial obligations and requirements.