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Are Credit Cards Really That Bad?

Are credit cards a financial trap waiting to ensnare you, or a powerful tool for convenience and rewards?

The answer isn’t black-and-white. With sky-high interest rates on one hand and tempting perks on the other, credit cards spark debate: are they inherently bad, or can they be used wisely?

Today, we’re exploring the dangers, benefits, and ethical questions of credit cards, guided by biblical wisdom to help you decide for yourself.

 

Before we get started, I wanted to let you guys know about a cool thing our friends at Scripture Memory Fellowship are doing:

They’ve created an app called VerseLocker 

With this easy-to-use app, you can memorize any verse of the Bible in the translation of your choice. Can you say your verse correctly as random words gradually disappear? If so, move on to the accuracy test and start typing your verse from memory. When you’re done, see where you rank on the global leaderboard, organize your verses into custom collections, or download a ready-made collection of recommended memory verses. 

Scripture Memory Made Simple! 

  • Memorize any Bible verse in any translation. 
  • Play your verses anywhere, anytime. 
  • Try and say your verse from memory as the words are gradually blurred out. 
  • Create and download custom verse collections. 
  • Listen to your verses on a loop. VerseLocker keeps playing until you stop it! 

Download VerseLocker from your App store or go to verselocker.com

 

The Danger of Credit Cards

The true danger isn’t the card itself, it’s carrying a balance you can’t pay off.

  • Without an emergency fund, a credit card becomes a debt trap that’s almost impossible to escape.
  • Proverbs 22:7 warns: “The rich rule over the poor, and the borrower is slave to the lender.”
  • Interest rates can reach 30%+, and because they compound daily, your debt grows faster than you realize.

Here’s how compounding works:
When you don’t pay your balance in full, you lose the grace period. The issuer charges interest on the unpaid balance, adds that amount to your total, and then calculates interest on the new, higher balance. Day after day, your debt snowballs.

The result? Less discretionary income, stalled financial goals, and a cycle of debt that funds someone else’s perks.

 

The Benefits of Credit Cards

If used wisely—paid in full every month—credit cards can provide real advantages:

  • Security & Protection: Fraud protection, purchase protection, extended warranties.
  • Travel Perks: TSA PreCheck credits, airline miles, rental car insurance, no foreign transaction fees.
  • Rewards: Cashback, points, or statement credits.
  • Convenience: Separation from your bank account, easier budgeting, and credit-building potential.

Luke 16:10 reminds us: “Whoever can be trusted with very little can also be trusted with much.”
Paying off your card monthly is one way to show stewardship in small decisions—proving you can handle bigger financial responsibilities.

 

The Spending Danger of Rewards

Chasing rewards can backfire. To earn $1,000 in cashback at 1.5%, you’d need to spend over $65,000. If you’re not disciplined enough to pay the balance in full, those rewards quickly vanish under interest charges.

1 Timothy 6:10 warns: “The love of money is a root of all kinds of evil.” Pursuing perks beyond your means can lead straight into debt bondage.

 

The Ethical Dilemma

Where do those rewards come from?

  • Credit card companies fund perks through interest charges and fees from other users.
  • In other words, your cashback or points are subsidized by someone else’s financial pain.

That raises a serious question: Are we profiting from a predatory system?

We’re not causing others to be foolish with money, but our participation does incentivize companies to continue practices that prey on the vulnerable. That’s an ethical tension worth wrestling with.

 

Biblical Principles for Credit Card Use

If you choose to use a credit card, these habits can help you leverage benefits while avoiding the debt trap:

  1. Pay in Full Each Month – Avoid interest charges and debt (Prov. 3:27).
  2. Stay Within Your Budget – Treat your card like cash (Luke 14:28).
  3. Know the Terms – Understand APR, fees, and grace periods.
  4. Keep Utilization Low – Stay under 30% of your limit (Prov. 21:5).
  5. Pay on Time – Avoid fees and protect your credit (Eccl. 5:4).
  6. Avoid Cash Advances – These come with steep fees and immediate interest.
  7. Track Spending – Use apps or alerts to prevent overspending.
  8. Don’t Chase Rewards Blindly – Never spend just to earn points (Matt. 6:24).
  9. Limit Your Cards – Fewer cards = less temptation.
  10. Build an Emergency Fund – Credit is not a substitute (Prov. 6:6–8).
  11. Avoid Minimum Payments – They keep you in debt for years.

Handled this way, a credit card can be a tool rather than a trap.

 

So, Are Credit Cards Really That Bad?

It depends on how you wield them. Like fire, they can warm your home, or burn it down.

Psalm 37:21 says: “The wicked borrow and do not repay, but the righteous give generously.”

If you’re revolving credit card debt, you’re lowering your standard of living, reducing your generosity, and funding someone else’s perks with your hard-earned money.

But if you pay in full each month, use the card within a budget, and weigh the ethical cost of rewards, credit cards could serve as a useful tool for stewardship. However, it is playing with fire.

 

Closing

At the end of the day, credit cards aren’t the enemy, it’s debt, greed, and poor stewardship that enslave us. So ask yourself: Are you using credit cards to honor God and manage money wisely, or are they managing you? Reflect on your financial choices, seek God’s guidance, and commit to stewarding every dollar with eternal perspective.

 

 

Next Steps

 

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The topics discussed in this podcast are for general information only and are not intended to provide specific investment advice or recommendations.  Investing and investment strategies involve risk including the potential loss of principal. Past performance is not a guarantee of future results.

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