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More and more people are being swept away in a sea of high-interest credit card bills. Personal debt and bankruptcies are at an all-time high. Families are spending more than they actually earn. Here is what you can do to turn the tide of debt and find true economic success!

Learn the why behind the headlines.

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The entire world is in debt. Governments and nations routinely overspend. States, towns and municipalities are also plagued by increasing deficits. Just looking at the state of California’s fiscal mess—a budget shortfall estimated at $35 billion—reveals the wide scope of this problem.

To please their constituents, many government leaders take the stance of “pork barrel spending”—catering to special interest groups who demand programs that benefit their own agendas. Such leaders are compelled to overspend.

This pattern is also being demonstrated in people’s personal lives!

Of course, instead of modifying their spending, governments simply raise taxes when they overspend. However, people cannot increase their income.

Millions are being robbed of their financial security. Their families’ stability is crumbling away, and with it the future of their children. This is mainly caused by one thing: Debt. The toll it has now taken on society can only be described as a crisis!

Why? What is it that consumes so many with the urge to charge purchases?

Why do so many live beyond their means—requiring loans and credit cards to survive—thus fueling the credit industry?

Consider the following:

• 50 million credit cards are issued each year.

• Up to 25 million people in America are “two paychecks from the street,” with nearly 15 million just “one paycheck from the street.”

• The average American carries a cumulative credit card balance of $8,562.

• The average family has 10 credit cards.

• 78% of Americans are considered “credit worthy” by the lending industry.

• In 2001, Americans paid over $50 billion in finance charges to creditors.

• Currently, the total consumer debt for Americans is a record $735 billion.

• An average minimal payment is 90% interest and 10% principle.

• There were 1.354 million bankruptcies in 1999 alone.

• In 2001, 1.5 million credit card holders declared bankruptcy—higher than any point in history.

• Almost half of all American households find it difficult to make their monthly payments, and consider bankruptcy a safe option.

BusinessWeek reports that total household debt—car loans, mortgage, school loans, etc.—passed 100% of the household’s total annual income.

• In the United Kingdom, the average debt per household is £10,700 (GBP)—over $17,000 (USD).

• A Datamonitor’s Consumer Review 2002 study shows that now, more than ever, people are more willing to buy unaffordable prestigious gifts, simply because they can slowly pay for them.

How many of these statistics include you? Have you found yourself making the minimal payments month after month? Have you paid off a car note or mortgage payment with credit cards? Have you found yourself making purchases you knew you could not afford, but just had to make? If you are an average American, the answer is yes. And, unless drastic action is taken, bankruptcy may one day seem like a healthy alternative for you.

Now for the real question: How can one get out of this dilemma?

Campaign for Debt

One of the most common phrases used throughout the holiday season is “Charge it!” Many millions of shoppers uttered these same two words as they paraded through crowded malls and stores in search of holiday bargains. With increasing prices, and an ever-expanding list of family and friends for which to buy, more and more are being herded toward credit card bills and interest charges—all wrapped under the convenient “bow” of “buy-now-pay-later” merchandising. One month after the festivities and merry-making has ceased, buyers must contend with how and when to pay for their purchases.

With so many already in debt, the lending industry is turning more of its attention on younger customers. 

On university and college campuses, creditors are commonly found swarming students with credit offers. For a free t-shirt or CD case, thousands sign up for credit, and begin their path down the dangerous slope of debt.

A Georgetown University study showed that 78% of undergraduates had acquired at least one credit card, with 32% having four or more. The average debt for these students was close to $3,000, with 10% owing over $7,000. Appealing to youths’ desire to have the latest clothes, music and cell phones, lenders practically guarantee that young cardholders become lifelong debtors.

The lending industry’s strategy is better described as marketing bombardment, and is a key reason that their profits have soared by nearly 50% in just two years—and are at a five-year peak! With each credit company jockeying to be the biggest, continually vying for more cardholders, their target audience seems to be just about any adult with a pen in hand.

This marketing is best portrayed through the media. Commercials, television programs, music and movies depict people on the peak of trends—enjoying the best of the best—as being happy, content and fulfilled. (Of course, to the average American, it would practically take an additional full-time job to stay on top of this.)

While one should always seek to have the best he can afford, this subtle merchandising has helped spawn a generation conditioned—trained—to SHOP! It is no wonder that 93% of American teenage girls reported that shopping is their favorite activity. The “buy-now-pay-later” mentality provides  many with the justification to support this “hobby”!

This is dangerous thinking. Little does society in general realize the hazards of unchecked credit spending. Most will spend years trying to pay off mountains of debt that only took moments to make. In reality, the buy-now, pay-later mentality is better described as “buy-now, agonize-later”!

Aside from selective age-based advertising, creditors are also taking a bold step with their merchandising. Think about it. How many times have you received a solicitation in the mail for “pre-approved” credit? How many of these offered “special introductory rates,” “low monthly APR,” “free application gifts,” “everyone gets approved,” “no payments for three months,” “an extra 10% off your purchase,” etc.?

Studies show that the average American receives seven or more offers from credit card companies a year! And this is only the beginning. These ads are more commonly sent to families (those who would naturally have more people to shop for) and those with a bad credit history (those who have already established that they have problems controlling credit spending).

Credit solicited by mail comprises nearly three-quarters of all accounts opened. These campaigns have been so successful, that they have more than doubled since 1993—when 1.52 billion solicitations were sent to Americans. In 2002, 3.3 billion were mailed. Many are often fooled into believing they have a good credit rating, simply because they receive them. It is logical to think that if lenders are offering you credit, it is because they trust that you can and will pay for it.

But this is far from the truth.

While offers are sent to those with good and bad credit, they are more often sent to those with bad credit—in hopes of further proliferation of debt. The reasoning behind this is that if the applicant has already fallen into the pattern of making unwise charges, meanwhile paying high interest, he will continue to do so. In addition, any who have recently declared bankruptcy cannot do so again for at least seven more years!

In a move to better “checkmate” their clientele, aside from increased marketing, the lending industry has also been vigorously pushing at Congress to pass tougher restrictions through bankruptcy legislation. Travis Plunkett, the legislative director of the Consumer Federation of America, stated, “Credit card issuers are brazenly lobbying for new bankruptcy restrictions at the same time their aggressive marketing and lending practices are pushing many families closer to the financial brink. While the issuers urge Congress to deny families access to bankruptcy…their profits are soaring” (emphasis ours).

The creditors’ dual attack—to protect and ensure their increasing profits—shows the cunning subtlety behind this billion-dollar industry!

Now, instead of asking, “What’s in your wallet?” as a major creditor asks in its advertising campaigns, one should ask, “How much of what’s in my wallet is actually mine?” After examining the facts, it becomes more apparent how consumed—and entrenched—in debt society has become!

Debt on the World Scene

The world, in many ways, is tightly woven together. Although competition, disagreements, disputes and wars commonly occur between nations, each nation is like a strand interwoven into a giant economic fabric.

Try to think of one entirely self-contained nation. For the most part, each nation on earth is dependent on another—even multiple nations—for survival. The actions of each directly or indirectly affect all the strands. An example of this was U.S. oil prices forging to fresh two-year highs because Venezuelan oil workers pledged to a 25-day strike, for the removal of Venezuelan President Hugo Chavez.

In the world of finance, borders and territories are not as defined as they are on maps!

What about national debt around the world? How have countries dealt with debt management and repayment? Surely, governments and officials, with all their resources and means, have found a way to lower unnecessary spending, thus curtailing debt—right? The answers are surprising.

Space does not permit the inclusion of the debt of all nations. However, notice some general national statistics:

Asia and South Pacific Islands: With $139 billion (USD) in foreign debt and a crippling economic crisis, Indonesia is described as “a ship that has almost sunk.” Other issues, such as three decades of mismanaged funds, environmental concerns and social problems, add to Indonesia’s woes. Japan, with the second largest economy in the world, has a national debt of $5.3 trillion—140% of its gross domestic product (GDP – the final value of all goods and services produced in an economy in a given year). Although U.S. debt is greater, this percentage makes Japan the worst industrialized debtor nation.

Europe: In Italy, the national debt is over $1.4 trillion, and it is rising 7% a year. Although the EU only accepts countries whose budget deficit is less than 3% of its GDP, Italy—who has a deficit of over 100%—was made an exception. In the U.K., the national debt is at $461.3 billion—with its citizens owing $33.6 billion in credit card bills.

North America: The U.S. national debt is at $6.3 trillion, requiring annual interest payments in the hundreds of billions! With an established limit of $6.4 trillion, the Treasury approached Congress in December 2002, asking for approval on increasing this limit. Because the national debt has increased $1.15 billion per day since September 11, this set limit would be surpassed by February 2003. With the U.S. population estimated at 290 million, each citizen’s average share of this debt is over $20K! In Canada, the national debt is $600 billion—the second largest debt behind Italy, in comparison to the size of its economy.

Countries in Africa, South and Central America and the Caribbean are also reeling from debt problems, and often cut back in health services or other vital areas of government funding simply to make their payments!

These figures, along with the ever-increasing threats of terrorism, war, geopolitical struggles, lowered trade, crashing investments, poverty—such as the astounding 1.2 billion people worldwide living in absolute poverty (on less than $1 a day)—and other factors directly affect national debt.

After examining debt on the world scene, it is evident that the global economic “fabric” is riddled with debt! No one knows just how to keep the global economy from sinking into a sea of credit woes.

On both the consumer and national levels, man has once again proven his inability to stem the snowballing burden of debt.

Consumer Debt: Did You Know?

Consider some additional debt facts:

• Industry watchers estimate that by 2006, about 30% of all consumer spending will be on credit cards.

• The average credit line is $3,500. A decade ago, it was $1,800.

• If you make the minimum monthly payment on a balance of $4,000, with an 18% annual rate, it would take you 42 years to pay it off.

• Identity theft and fraud have reached epidemic levels—even finding their way inside families! It is becoming more common to hear cases of teens, upon applying for credit, discovering that their parents have used their identity to have multiple lines of credit!  

• Only 32% of parents regularly talk to their children about financial matters (“2001 High School Financial Literacy,” National Foundation for Credit Counseling News).

• In 1973, U.S. households saved 8.6% of their income to a savings account. In 1990, the typical U.S. household saved 7.8% of its income. In 1993, it dropped to 4.2%. Today, the average household spends 0.1% more than it actually earns!

Identifying the True Source of the PROBLEM

Before continuing, realize that not all credit is wrong. In fact, credit is an important part of life, to be used cautiously and sensibly. Through loans and developing good credit, people can buy their first car, home or apartment, or put themselves through college.

Credit is not the problem. A lack of self-control drives many into irreparable debt—even bankruptcy. The reckless, impulsive mentality behind most consumers’ borrowing has turned the loan industry into a thriving business. Credit is often used to purchase luxuries, leaving little to show for it except the bills. As a finance reporter for BBC News stated, “The temptation to borrow too much is greater than ever before.”

Obsession with material goods further fuels the ever-growing debt crisis. In order to have more, people today spend more than they actually make. They are accustomed to increasingly luxurious lifestyles, feeling the need to spend more—to have the best clothes, newest gadgets and fanciest cars—the “keeping up with the Joneses” mentality. They are further driven by the rationale, “Everyone else is doing it!”

Many have the tendency to shop when feeling unhappy or discouraged in order to feel “better.” Ironically, much of their initial unhappiness and worry stem from debt. So the cycle continues.

WHY? As governments and their citizens slip into bankruptcy, why has man not found a way to curb his appetite for material gain?

Author John Steinbeck wrote, “If I wanted to destroy a nation, I would give it too much and I would have it on its knees, miserable, greedy and sick…We can stand anything…save only plenty.” These sobering words should serve as a warning to any nation currently in this condition. The U.S.—seemingly the richest nation in the world—is far from rich in character and personal responsibility for its affairs. As Alfred Hackbarth, of the National Foundation for Consumer Credit, explained, “There is a BREAKDOWN in personal responsibility.”

This is true of society today. Most are so busy living for the sole purpose of pleasure, comfort, gain and entertainment, that personal responsibility and character-building are not as important as they once were. This present generation is by far much different from a few generations ago.

News headlines of credit fraud, identity theft, corrupt and failing governments, corporate and consumer bankruptcies and others are telltale signs of the miserable, greedy and sick state of this debt-ridden society.

What Does the Bible Say About Debt?

Many differing opinions on why the debt crisis—and how to end it—fill newspapers, magazines, radio shows and books. Prominent financial counselors offer endless advice that, while extremely helpful, does not analyze the crux of this subject.

If so many “experts” have so many theories (most often contrary to what the other “experts” say), how does one know which advice to follow? Where can people find real solutions to their real problems?

The answer is the Bible—God’s Instruction Manual! Just as there are manuals for how to operate certain complicated machines and devices, the Creator God included an Instruction Manual for the most complicated, delicate and complex creation ever made—man. Only by carefully following the guidelines—laws—listed in this Manual, can humanity properly live and achieve success.

Think of the following. God has created laws to govern every aspect of His creation. His laws govern everything. Just as the laws of gravity and inertia govern certain portions of His creation, God has financial laws that govern all aspects of money issues. By following these laws, people can ensure their financial security.

Leviticus 25 and Deuteronomy 15 record laws regarding creditors and debtors. These laws explain that the needy could borrow to pay for his needs—not his desires. Loans were to be repaid and if, at the end of six years, they were not paid in full, the lender forgave the borrower of the debt—giving him a clean slate! (Deut. 15:1-11).

Although unknown to most, this was the basis for U.S. bankruptcy law. It is based on God’s Year of Release, which was a way of providing debt relief.

In addition, aside from borrowed funds, the Jubilee Year included the return of any land or farm that may have been mismanaged and confiscated. This was God’s way of ensuring that poverty did not plague a family for generation after generation.

These are just a few of God’s laws that would prevent most of the financial problems today. Every seven years, debt would be eliminated. Interest payments would not consume income. Credit would not be available for “pleasure-spending,” and would only be available for genuine need. A clean slate would be provided for all, and allow people a chance to learn from past mistakes.

In modern times, the Seventh Year of Release, as God established it, is not used. Only through bankruptcy or paying off debt can one be released from debt.

If possible, a person should pay off all his debts. Doing so through hard work, diligence, self-control, saving money and cutting back on unneeded expenses helps one to build character, learn valuable lessons and take charge of his finances. One should NEVER willingly go into debt, or willingly not pay bills, with the intention to file for bankruptcy.

God describes this as evil: “The wicked borrows, and pays not again: but the righteous shows mercy, and gives” (Psa. 37:21). Bankruptcy should not be viewed as a healthy way of escaping debt. This is simply a way to deal with the effects, but does not address the causes driving the debt crisis. It is comparable to taking an aspirin to alleviate cancer—it does not fix the problem!

However, if a person finds himself unable to pay off his debt, it might be wise to contact a credit counseling service, or possibly even a lawyer, to learn about one’s financial options.

Note that God does not consider money evil. Many scriptures speak about the correct and incorrect usage of money and material possessions. As we have already seen, the Bible has many important financial rules, overlooked by most, explaining the importance of proper financial management and ways to deal with money.

The Bible warns that, if financial matters are not kept in proper focus, the over-emphasis on the pursuit of money—or the love of it—becomes “the root of all evil” (I Tim. 6:10). This—in conjunction with disobeying God’s financial laws—is what has caused so many of the financial worries plaguing the world. As with most things in life, maintaining proper balance is a key to not being consumed by this evil.

The apostle Paul wrote, “But they that will [are willing to] be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows” (I Tim. 6:9-10). Paul clearly explains that those seeking to have riches are pulled into a snare of sin! The Tenth Commandment clearly states, “You shall not covet” (Ex. 20:17). This lust—coveting—for riches and material gain is what drives so many to sign up for credit cards, and charge thousands of dollars worth of merchandise.

Proverbs 22:7 states, “The borrower is servant to the lender.” When people borrow, they place themselves under financial “slavery” to their lenders. They become obligated to them, over their obligation to God.

This leads to another law concerning financial issues, which has also been ignored—even dismissed—by society.

The Ultimate Business Partner

While consumer, corporate and national debt is monumental in size, magnitude and scope, another far greater DEBT has been overlooked and ignored! This debt is toward God—and mankind has been stealing from Him for 6,000 years.

Notice what God says: “The silver is Mine, and the gold is Mine” (Hag. 2:8). The Bible further states, “For the earth is the Lord’s, and the fullness thereof” (I Cor. 10:26). “All that is in the heaven and in the earth is Yours…” (I Chron. 29:11). “For every beast of the forest is Mine, and the cattle upon a thousand hills…For the world is Mine, and the fullness thereof” (Psa. 50:10-12). God owns everything—so says your Bible!

God created all things (Gen. 1:1). He worked for six days, perfecting every detail of His creation. He designed, made, maintained and nourished everything. This includes not only all the materials and riches in the world, but also all mankind and animals. This sets the stage for important knowledge.

Everything that you take for granted as being yours, is not really yours—it is God’s! But, through His mercy, He has allowed man to use His planet and its resources. All God asks for in return is that one not steal from Him. Yet many continue to do so. How?

Notice: “Will a man rob God? Yet you have robbed Me. But you say, Wherein have we robbed You? In tithes and offerings. You are cursed…for you have robbed Me, even this whole nation. Bring you all the tithes into the storehouse…and prove Me now…if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it” (Mal. 3:8-10).

God only asks for a tithe—10% of what one makes—and lets you keep the remaining 90%, although that still belongs to Him! God challenges skeptics to “prove” His promise of blessing the tithepayer.

Some may argue, “But I can’t afford to tithe.” But God says otherwise. You cannot afford not to tithe!

God blesses generous givers (Prov. 11:25; 22:9; II Cor. 9:7), and no one else has the power to bless, as God does. While many seek ways to stretch their income, the most unlikely way is the only method to do so. By simply giving back to God a small portion of what is actually His, God agrees to bless you more than you can ever hope. (To learn how to properly do this, read our booklet End All Your Financial Worries.)

Let God’s promise work for you today! Do not wait until financial ruin hits you to obey God!

Finding True Prosperity

The average person is more intrigued with money than practically anything else. Wealth and prosperity are equated to success, and have become the main goal for many. They assume that true happiness will flow from it. This reasoning is a main contributor to the countless monetary problems permeating their lives.

However, the definition of true happiness and prosperity is in the Bible—in God’s very words.

The Proverbs explain, “Labor not to be rich: cease from your own wisdom. Will you set your eyes upon that which is not? For riches certainly make themselves wings; they fly away as an eagle toward heaven” (23:4-5), and “Happy is the man that finds wisdom, and the man that gets understanding. For the merchandise of it is better than the merchandise of silver, and the gain thereof than fine gold” (3:13-14).

Understanding and wisdom are more important in life than wealth, which will one day disappear and leave nothing to show for it. This is most evident in today’s debt-burdened world. The Hebrew word for “understanding” is tabun, meaning intelligence, discretion, reason, skillfulness, understanding and wisdom. In no way does it refer to wealth or material possessions.

This should be the prosperity you seek, not man’s false definition of prosperity. True wealth—wisdom, understanding and obedience to God—should be what you seek to have, not a new DVD player, digital camera or flat-screen television. All these things are physical and, while pleasant to have, are unneeded luxuries, not to be confused with life’s necessities. (To learn more, read our article “”)

It is better to lack comfort and be wise and happy, than to have all the latest gadgets, and be miserable with concern and worries—a slave to debt and creditors. Apply these steps in life to turn the tide on creditors.

Always remember Christ’s warning, “Beware of covetousness: for a man’s life consists not in the abundance of the things which he possess” (Luke 12:15). Paul wrote, “Be content with such things as you have: For [God] has said, I will never leave you, nor forsake you” (Heb. 13:5).

One day, the corruption, lies, increasing debt, poverty, material obsession and fraud that consume so many will no longer exist. With the establishment of God’s kingdom on earth will come the enforcement of His laws—including those that govern finances, loans and debt.

In the millennium, the Year of Release will come every seventh year, ensuring that every child will have a home, and every family will live without financial worries. Humanity will be happy, helping each other, and showing mercy and brotherly love toward fellowman. All debt will be gone. All will pay God His tithes, and in turn, have all their needs provided for them. People will then wonder why so many did not keep His laws before. They will come to realize that the only luxury—necessity—worth anything is that of true happiness and abundant living as God has always had in store for mankind.

But, you can begin practicing these laws in your life now! By keeping God’s active—living—laws, you can begin to experience the joy God meant for mankind—but is lacking in society because man has broken those laws.

By obeying God’s financial laws, you will slowly begin loosening the chains of financial bondage. As promised, if you faithfully apply all His laws, God will, in return, provide for your every need. This is the promise of God—and carries more weight than all the platinum cards in the world and all the gold in Fort Knox!

You now have the knowledge of God’s monetary laws. By acting upon this understanding, you will truly begin to take control of your finances.

The path to financial freedom—yet undiscovered by so many—now lies ahead of you!

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