America & Debt

I was recently watching the news about the debt crisis in America. We all love nice things which cost money. They featured a family with $60,000 worth of credit card debt. They owed some money, couldn't keep up and then the fees and penalties made it worse.

What made this family stand out was how much they owed. Even in America $60,000 is a lot for credit card debt. If the amount owed was due to a medical illness, school loans or a mortgage no one would have flinched an inch. However, what they owed was substantial because the average family owes credit card debt of $10,000 and to top it off 6.5% of American families are more than 30 days past due, thanks to the recession.

I really can't blame these people as credit card companies have a way of targeting and seducing both old and young people to apply for the cards regardless of if they can need or can manage having a credit card. Credit card companies are now feeling the pinch as settlements of up to 70% off what is owed are now being offered and accepted by credit card companies from their debtors.

The family with the $60,000 debt paid $16,000 to end their debt nightmare. They were able to do this because some credit cards companies are willing to get something now instead of nothing later.

However, I believe debt is undesirable when not absolutely necessary. Debt should be a last resort because it is a form of slavery. The creditor has a hold over the debtor. In the Bible, Proverbs 22:7 “The rich ruleth over the poor, and the borrower is servant to the lender” this shows debt is a negative that should be avoided if possible.

The way America is structured; student loans, mortgage loans and car loans are often necessary and using credit cards to pay for health care expenses is acceptable. However, using credit cards to keep up with the Joneses is ridiculous especially when the number one cause of divorce and relationship problems is financial.