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Finances Rule 3 - Debt
Publication: Banner of Love, 01/2014

Author: Don Richards
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Rule #3:  Get Out, and Stay Out, of ‘Usury’ Debt

The Bible tells us to avoid all debt, right?  After all, doesn’t scripture tell  us to “neither a borrower nor a lender be”? No, it doesn’t! That quote actually is from Shakespeare’s classic play “Hamlet”.   It is not from the Bible.   The Bible does not say that. (It is sadly instructive that many of us are much more familiar with quotes from the world than we are quotes from the Bible.)      The Bible does warn us about debt; but not necessarily all debt.   It is certain kind of debt, that draws strong prohibitions from several scriptures. Moses was the first to address this issue as he led the nation of Israel out of Egypt. At Exodus 22:25, for example:       “If thou lend money to any of my people that is poor by thee, thou shalt not be to him as a usurer, neither shalt thou lay upon him usury.  Again, at Leviticus 25:35-37 Moses warned the people that they had the duty to lend money to the individuals who had fallen upon rough times and become poor. However, Moses told them the law strictly forbid the charging of interest, especially “usury” interest: “Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase”.  What Moses is telling us here is that the creation of debt is not forbidden, but the charging of interest to our fellow members of the church with interest is forbidden.  The Old Testament law has not put an end to money lenders, but it has put them out of the church. What the real prohibition is under the biblical law, is the gouging of people by charging them interest on their debts.  The term “usury” under today’s laws came from the biblical use of the word.    Under today’s standards, however, it does not mean merely charging interest, the legal issue of “usury” is the charging of an unreasonably high  (i.e. exorbitant or unconscionable) rate of interest. Paraphrasing the words of Nehemiah 5:10, the lending of money, in and of itself,  is not prohibited (and therefore neither is the borrowing of money) if the need exists.  However, as Nehemiah strongly instructed the people: “I pray you, let us leave off this usury.”   It is interesting that no where in the Bible is the lending, or borrowing, of money prohibited.(See Psalms 112:5, Jesus’ words in Sermon on the Mount Matt. 5:42).  In fact, most biblical quotes in this regard tend to indicate it is not “if” money is loaned, but that “when” money is loaned; and “when we” loan money . . .  (both Moses and Nehemiah included themselves in their instructions, indicating both apparently had made loans themselves). What is prohibited, is the charging of interest, and especially interest at unreasonably high rates. It is borrowing, and the lending,  that puts a person in bondage to debt that is prohibited (see Proverbs 22:7). If we borrow, we must repay Psalms 37:21 tells us that it is the wicked that borrow and do not repay.  If we do borrow, we have the moral duty to repay the debt.  (See also Romans 13:7).  Yet bankruptcy filings continue at a high level in this country because people cannot repay their debt,  and bankruptcy has lost the stigma once associated with it.   The Lord’s advice then was not to borrow unless we could pay it, and not to either lend or borrow at high interest.   That advice is just as applicable today, under our current economic credit environment.      At one point in recent history almost every state had laws prohibiting the charging of “usury” -- high interest rates.  Many states annually established a “usury” rate that could not be exceeded by bankers and other consumer credit lenders.   However, because of recent years’ political lobbying and manueverings in the nation, as well as most states,  the usury level of interest has been allowed to dramatically increase; and easy credit is now provided to individuals to whom it previously was limited or denied.   As such, it has put far too many people under the bondage of continuing and escalating debt without the ability to repay. -- Almost every credit card company today charges as high as 30 per cent interest on credit card balances. --  Credit card companies flood the mails with “easy” to qualify credit cards, knowing the profits off interest alone far exceed the initial principal charges to the cards as the majority of consumers pay only the monthly “minimum” balances.    -- Almost every major business chain offers their own credit cad because they know they will make much more off the interest on credit card debt than the profit off the original sale.  -- Many car dealers offer “no interest” car loans, but raise the list price of the car to make up the difference; then include a provision in the loan for automatic interest if payments are late or missed. -- Pawn shops and consumer loan businesses make huge profits off high interest rates, especially on the poor. -- A major recession in the country a few years ago originated from the creation of high-risk, no-down-payment  home loans, with escalating interest rates, which soon forced many first-time home buyers into bankruptcy once the interest rate skyrocketed on them. An interesting note regarding America’s high interest rates is that statistics from the Internal Revenue Service related to deductions from income taxes, shows most Americans devote/deduct 10 times as much money to paying interest as they do for contributions to church/charity. Basic rules-of-thumb regarding debt 1. Do not borrow unless you have the ability to repay; unless you have a medical or family emergency. 2. Lending money to help a poor person in need is commendable; but the charging of interest (at any rate) is morally wrong. 3. Borrowing, with long-term financing, can be beneficial for the purchasing of things that help provide income, or provide the longterm necessities of life.  This includes matters such as for your business, or home purchases, so long as the length of repayment time, and the interest rate, are reasonable.  It should never be for consumable products with a short life span. Credit card, or other high-interest, debt 4. Credit card debt (or other high-interest rate debt) should be no greater than your ability to pay off the balance over a short-time frame (i.e. preferably monthly, but clearly less than one year). 5. If you currently have high credit card debt, begin immediately to get out of the debt:  (1) stop charging. (2) make a list of your debt in order of payment priority (either by the card with the highest rate, or the card with the lowest overall balance). (3) pay as much monthly as you can to the priority card, while paying the minimum on the rest.  (4) As you pay off one card, increase the payment to the next priority card. (5) do not re-charge on paid-off cards, or preferably, destroy the card.                --  Don R. Richards

larry heldman  

Elder James Compton (1905 - 2007)
Elder James Compton was the original founder of the 'Gospel of Grace Tape Supply.' His collection of tapes began as he traveled to Church meetings and Associations recording sermons on Reel to Reel. He has maintained this library of sermons faithfully over the years and are now the foundation of PB Sermons. org. This web site is dedicated to Elder James Compton (1905 - 2007)