Are Credit Cards Sinful?

Here’s a debate that’s fun to rip open from time-to-time. Are credit cards sinful? More specifically, is using a credit card a sin?

It’s a tough question to ask and the answers given are as contradictory as they come. Whatever your thoughts on the sin issue, opinions tend to boil down to one of two camps:

  1. Credit cards are okay if used properly. This camp believes credit cards can be good if they are paid off at the end of every month. They generally have no biblical backing behind their position, but they don’t believe there is anything in the bible that goes against their beliefs either.
  2. Credit cards are sinful. This group tends to believe credit cards are sinful because of the way they harm people. I’ve heard this group call credit cards “the new cigarettes”. Sometimes they have a few Bible passages to back themselves up, but most tend to use statistics and experience to make their point.

Breaking It Down

Before we can answer the sin question, we need to figure out what exactly a credit card is.

When you receive a credit card, you are given a revolving line of credit. Every time you pay for something with the card, you are taking out a loan for the cost of that item. The line of credit has a limit and if you hit that max they cut off your ability to borrow. Unlike normal lines of credit, the cards have no collateral attached to them and the interest rate is extremely high (with some cards charging as much as 50%).

Furthermore, a credit card’s basic function is to help you purchase things you couldn’t otherwise afford. Maybe rent came before your paycheck, or you can’t buy food and the new iPad so you use the credit card (take out a loan) to by the thing you want and get what you need.

At its core, a credit card is a device that gives you small, high interest loans to help you overspend. It’s culturally justified through credit scores which are numbers generated by large corporations t0 determine whether you’ll be able to get more credit cards in the future.

So is it a sin?

It’s hard not to stir up controversy with this one, but I’m going to do it anyway: yes, using credit cards are a sin…most of the time. Let me defend myself a bit.

The book of Proverbs has a lot to say about money, but one of the strongest statements of the book is 22:7 where it says, “The rich rules over the poor, and the borrower is slave to the lender”. It is important to note the word slave because it comes up regularly throughout the Bible and especially the Gospels.

In Romans 6:16-18, Paul draws a pretty hard line in the sand when he says,

“Do you not know that if you present yourselves to anyone as obedient slaves, you are slaves of the one whom you obey, either of sin, which leads to death, or of obedience, which leads to righteousness? But thanks be to God, that you who were once slaves of sin have become obedient from the heart to the standard of teaching to which you were committed, and, having been set free from sin, have become slaves of righteousness.”

As Christians, we are no longer slaves to sin, but slaves to righteousness – to God. With credit cards, we’re not just slaves to the lender (though, we are), but also slaves to a greater sin: greed.

Greed

At their core, loans exist to help you spend more money than you have. That’s called overspending and poor stewardship. God has given you an amount of money to handle. And in Jesus’ parable of the talents we see the anger God has for people who misuse and mishandle the money He has given us.

And even though there are a few unique situations where it can be sometimes beneficial to go into debt (specifically, when buying a home or paying for sudden medical expenses), it’s most often a desire to have something new that puts us into debt.

Going $20,000 dollars into debt to buy a new car when a $5,000 dollar cash car works just as well is a purchase made from greed. You don’t need the new, flashy, higher gas mileage car. It’s not going to save you any money and after 6 years (standard car loan length) you will have paid significantly more than $20,000.

Do you think God is honored when you use money you don’t have (credit cards, car loans, etc) to buy something you don’t need (a car, a piece of gum, a new iPhone) to impress people who aren’t God? I don’t.

Jesus tells us we cannot serve God and money, and yet while going to church every Sunday, most of us are serving money the rest of the week. The culture is so innundated with greed that the average credit card holder owes $15,799 dollars (in credit cards).

Take notice of this, because it’s important. It challenges everything the culture has to say about money, but it’s true.

Are Credit Cards Ever Good?

I said credit cards are sinful most of the time, what did I mean by that?

When can a credit card be good? Presumably, there is a way to use a credit card appropriately and it looks like this:

  • Plan out a detailed budget every single month.
  • Never spend more money than is allowed in your budget (in credit cards, cash, and other forms of payment).
  • As soon as you can, pay off the entire balance (same day if possible).
  • Rinse and repeat.

What does this sound like? It sounds like living on a cash budget. The only difference is you have the extra step of paying the credit card bill. Why include that step at all? Reward points have repeatedly proven to get us to justify overspending and encourage holding debt (with 46% of credit card holders rolling balances over month-to-month).

Stop Playing Their Game

It’s time to stop playing the credit card game, step out of our culture, and ask the hard question: is this a sin.

Greed is the number one sin in the developed world. It’s a problem for every person who calls themselves an American, regardless of income. It’s so subversive; Jesus had to talk about it more than any other sin.

It’s a problem. Are you dealing with it?

What do you think? Are credit cards sinful? Why or why not?

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  • http://marriedwithdebt.com John | Married (with Debt)

    If you don’t carry a balance from month to month or ever charge more than you could pay immediately, I don’t think it’s a sin.

    Here’s why: sin starts in your own heart. If you are using a card only for the convenience or rewards, then it is not a sin. You have no ill intent.

    Calling it a sin, in my opinion, gives the card more power than you have.

    Asking this question is the same as saying that anyone who gets a tax return is a sinner. Why not? You are giving a loan to the government, right?

    • http://www.patheos.com/blogs/faithandfinance Tim

      I agree with you John. I use a credit card all the time, so my views are different than the author’s! I think it’s good to open the conversation, and I really appreciate your well though/respectful comments.

      Everyone’s comments are excellent for that matter!

      For me, credit cards are a way for me to manage my money better. It’s easier for me to make one payment and to automate my bills. Charge disputes are a piece of cake with a CC, traveling as much as I do DEFINITELY requires a CC, and the rewards help us to go on a free vacation every year.

      I personally wouldn’t call credit cards a sin. A few comments below, Mark hit it right on the head “Anyone can make anything sinful if they overuse or abuse it. Should I not eat food because some people are gluttonous?”

  • http://www.modestmoney.com/ Jeremy @ Modest Money

    I agree with John here. By calling it a sin is to say that we cannot control ourselves to use it to our advantage. It is your greed that is the sin. If you let greed prevent you from using credit cards wisely, you are just avoiding taking responsibility for your own actions. I use my credit card for most of my purchases, but I always pay it off each month. As a result I get cash back every month and they are essentially paying me to use it.

    So the focus should really be on teaching people to avoid the sins that credit cards make easier.

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  • http://section52.wordpress.com Mike Luna

    A good article. Lots of stuff in there to think about.

  • http://www.recordedtvhd.com Mark Terborg

    I understand your points and I understand why the the credit card companies do it (to make money off unwise people), HOWEVER, I do not believe credit cards are sinful. I believe that people are sinful in their actions.

    My wife and I never use cash unless we absolutely have to. We never use a credit card because we don’t have the money and we always pay our entire credit card bill every month. So why do we use a credit card?

    1. We live in electronic age. My paycheck is automatically deposited into our bank account. So why should I have to go to the bank to withdrawal cash when I have a piece of plastic that will allow me to pay for any item that I would buy anyway electronically and then pay off that my credit card electronically? So why should I use paper instead of plastic? :)

    2. So why not use a debit card if you don’t ever run up more on your credit card than you actually have? Because of rewards. You mentioned this in your article, but I feel this is the main reason why we use a credit card instead of a debit card. We get 1% back on everything that we purchase all year long that I was going to buy anyway! Depending on your situation that could be thousands of dollars a year. I don’t feel that because some people misuse credit cards or they just can’t control their own impulses that I should miss out on thousands of dollars a year.

    3. I can keep track of all my expenses and how much money I spend in any given category using Mint.com. Sure you could do this with cash if you manually put everything a spreadsheet.

    Anyone can make anything sinful if they overuse or abuse it. Should I not eat food because some people are gluttonous?

    Are candy bars sinful? :)

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  • Rita

    I agree with Alex’s views of a credit card…as God did state that we are slaves to the lenders. It’s not the piece of plastic you hold but the whole idea behind the piece of plastic. That’s what I think Alex was saying. There are many people who can’t, don’t or won’t manage their money well and fall into situations that they aren’t able to dig themselves out of. There are those who use plastic to keep up with the Jones or the Smiths or to brag about what a high limit card they have. I could say that those using the rewards from their cards are greedy while they tend to think of themselves as wise managers of money….the whole point is what does God think? So thank-you Alex for giving us something to think about. To John, Jeremy, Mike and Mark–I think you should use your money management skills to help out folks who simply don’t understand that concept.

    • http://marriedwithdebt.com John | Married (with Debt)

      Hey Rita – thanks for your comments. On my site I am working to help people, but I’m doing it without demonizing people who don’t deserve it.

      I don’t think that telling people they are bad is the best way to help them. I try to show them a better way instead, and I urge most people to use cash and ditch the cards.

      That’s the thing about personal finance – it has to be tailored specifically to each case. It’s not helpful to lump a whole group of people into the category of SINNER because some choose to use them unethically.

      You bring up an interesting point as to whether Rewards Points are for greedy people. I’m not sure I can disagree with you on that point. I use them because I want more money to pay off my debt and achieve true financial freedom.

      The question becomes: if you don’t carry a balance, are you borrowing money or engaging in a deferred payment arrangement. By this standard, if you operate a business and are given an invoice for goods purchased that is payable within 30 days, are you also a borrower there?

      If we look to nitpick into others’ lives, we can find that everyone is a sinner because the Bible has a million sins. I think the world would be served better if we worried about what we are doing in our own lives first.

      Great discussion.

  • Sabrina

    I think it is interesting that the author believes that getting a loan for a house is okay, but getting one for a car is an act of greed and poor stewardship. His example discusses a $5,000 car and a $20,000 car loan. First of all, I believe that the car I purchase should be reliable, and have a reasonable gas mileage so I can be a good steward of the Earth God has given me. I think a good car can be had for an amount somewhere in between $5,000 and $20,000. I think a responsible use of my money would be to put as much money down on the vehicle as possible, then pay more than the monthly payment to avoid as much interest as possible.

    But if you are going to take the moral stance that spending more than you have is evil and sinful, there should be no exceptions. If that is what you believe, then renting should be good enough until you can save for buying a house outright; and you should turn to your church to help with medical bills.

    I, on the other hand, will continue to use my credit card responsibly, paying it off in full every month. In doing so, I will build my credit rating and end up paying less for my car and home loans by virtue of a lower interest rate.

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  • Jon M

    I’ve been wondering if Credit Cards are a sin, but not for the reasons stated here. I’m more concerned that the rich may be taking advantage of the poor.

    Alex, your issue seems to be with debt and greed. While it’s true that CCs can assist the irresponsible in becoming slaves, the issues is not really CCs… but debt and greed.

    We run a strict budget based on last months income, and always pay our CCs in full. I haven’t seen a fee in years. In fact, CCs pay me between $20-$40/month to use their cards to purchase goods I would have purchased with cash.

    But where does the money to pay me come from? Well, the merchants pay a percentage, and then they pass that cost onto consumers by marking up their goods. When a person pays in cash… they are paying more than they would have if there were no fees for CCs.

    So I’m left wondering, “Are my rewards being payed for by people who can’t/won’t get a CC?”

    Remember free checking? It wasn’t free, but rather paid for by fees. In a sense, the poor and irresponsible were paying for the rich and responsible to have checking. Is the same thing happening with CCs?

    Even if I wasn’t receiving awards, are the poor and irresponsible paying for me to be able to use a CC at no cost?


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