Faith-Based Finance
Session IV: Dealing with Debt

Typical Use of Income

Reflection Question:

How has the financing of my lifestyle contributed to my overall debt, and how has this affected my giving and my saving for long-term goals?

The Rich Rule over the Poor, and the borrower is the Servant of the Lender.

—Proverbs 22:7

In 2006, there were 1.5 Billion Credit Cards in circulation in the United States, five for every man, woman and child in America.

In 2008, total revolving Credit Card debt reached
$950 Billion.

In 2009, the average interest rate for Credit Cards stands at 13.54%, ranging from 6% to 22.75%

In 2007, one in six of Credit Card Holders made only the minimum required payment on their monthly balances.

Consequences of Being in Debt

Reflection Question:

How have I experienced the economic, spiritual and psychological consequences of debt?

Three Rules for Borrowing

Reflection Question:

In what ways has my experience borne out the wisdom of the Three Rules for Borrowing?

Getting out of Credit Card Debt

Reflection Question:

What experiences have I had with getting out of debt?

In 2007, 27% of US households had no credit cards and an additional 30% paid off their balances monthly.

In 2008, only 8.3% of households owed $9,000 or more on their Credit Cards.