How to Avoid the Dangers of Debt
It seems nowadays that the American economy is built upon debt. And that’s a shaky foundation. What is debt? Is it wrong for the Christian to be in debt? How can one get out of debt—and stay out? If you’ve wrestled with any of those questions, you know debt is a complicated issue.
Five Types of Debt
To begin with, let’s set up a framework for our discussion by focusing on the different kinds of debt. What precisely are we talking about when we say the word “debt”? We define debt as any money owed to anybody.
The first kind of debt is credit card debt. If you use credit cards, your spending level will be approximately 34% greater than if you use cash—and this assumes that you pay your credit card bills off every month. So the mere fact of having the credit card available indicates that you’ll use it to spend more than you would otherwise. Adding credit cards to your wallet usually means you increase your spending, not that you spread out your current level of spending among more cards.
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