Comments on: Is There Such a Thing as Good Debt?

By: Jason Price

Jason Price — Tue, 21 Sep 2010 15:52:47 +0000

Moe,
I’m not sure where you picked up from the article I think we should define debt as good or bad.

Fundamentally, I can’t agree any type of consumer debt is good debt. (from the post)

I completley agree we shouldn’t define debt in this way (the point of the article). As Wiseguy states, debt interferes with our relationship with God.

By: Wiseguy

Wiseguy — Tue, 21 Sep 2010 14:48:44 +0000

Moe,

Your points are good, as they are congruous with the article. However, I don’t see where anyone is claiming that the Bible supports/justifies debt. It simply warns against debt — which isn’t to say that it forbids debt outright.

To specifically answer your question, I don’t think the Bible ever specifies “good debt” or “bad debt.” Most verses cited as mentioning debt are usually using debt as an illustration or metaphor and not addressing it specifically.

When I think of something as “good,” I think that it’s better to have it than not. By that definition, there’s no such thing as “good debt.” There may be acceptable/justifiable debt, but in no case is it better to have debt than not.

Ultimately, what matters most is if debt interferes with your relationship with God. If paying your debt means you can’t afford to give to God too, it’s clearly a problem because your priorities are backwards. Always give first to God. If you can’t afford your payments after that, you have failed to plan ahead and take on manageable debt.

By: Moe

Moe — Mon, 20 Sep 2010 23:27:09 +0000

Hi and I really enjoy reading your writings. However I do have a question, where in the bible does it stipulate good debt from bad debt… While the bible does not prohibit debt, it warns against it… All forms of debt… It does not matter whether it is for a house, a care, a student loan or credit cards it is all still debt.

I think we get off into dangerous territory when we try and justify one form of debt over another and call it biblical which has no biblical foundation. I could quote some of what you wrote and how it contradicts to what you wrote about good debt… The point is that either debt is debt or it isn’t… I think because mortgages, student loans, car loans are so widely accepted as normal that we just make up in our minds that it is ok.

Fifteen or thirty years to be in debt for anything is not what I believe God had in mind… Most of go into debt but we do so not because of God but because of man’s ways then we expect God to bail us out when the going gets tough.

So my question to you again is where in scripture does it stipulate good debt from bad debt?

By: Joe

Joe — Thu, 05 Aug 2010 01:29:01 +0000

“My belief is our society has to make a major shift to get the personal debt situation under control.”

I agree with this, but how realistic is it? I think it’s doable with regards to credit cards, but what about houses, cars and student loans? The last one alone is a killer for most kids these days. You can’t get a good job without a degree, but the cost of college is rising far quicker than general inflation and ever “student aid” bill that’s passed only pushes it up further!

The system is unsustainable as it is currently constituted.

Cars are the same way. Automakers have to pay people to buy new cars because they’re unaffordable otherwise. But cash back and ultra low teaser rates only disguise the fact that most people can’t afford the car in the first place..

By: Glass Is Half

Glass Is Half — Fri, 23 Jul 2010 11:14:38 +0000

My 2c?

I think there has to be some distinction – I absolutely agree that if/when you’re paying a bank and the hefty fees that they charge for any kind of long term loan/amortization/debt it should be discouraged but unless you are independently wealthy for whatever reason – there are no real options with regards to obtaining a home.

Car loans can possibly be avoided by buying 2nd hand and saving up the amount needed, but this is generally not an option for most people buying their 1st or 10th house.

I guess an option though that people have is to utilize a service like Zopa where at least the interst payments aren’t going to a bank, but rather to other individuals.

However I do agree also with Financial bondage and the sooner that you can get rid of your debt the better.

By: Financial bondage

Financial bondage — Fri, 23 Jul 2010 10:25:30 +0000

I used to think there was a thing called good debt. Not anymore. Good debt to me is any debt that is paid off.

By: Wiseguy

Wiseguy — Wed, 21 Jul 2010 23:59:10 +0000

One point on “good debt” I never see is in regard to building credit history. I plan to buy a new car (new to me, at least) in the next few months. I also hope to purchase a house a few years down the road. However, I have absolutely no debt experience; I only have credit cards. I could buy the car outright, but I’m thinking I should finance a portion to build some debt experience on my credit history prior to purchasing a house.

By: Donna Freedman

Donna Freedman — Wed, 21 Jul 2010 22:37:47 +0000

I hope to have a home of my own some day. It will require a mortgage, unless I win the lottery or something. I don’t consider a mortgage to be bad debt.
That said, I would pay it off as quickly as I could — and I would never consider the home an “investment,” but rather as the place where I live. As another reader pointed out, no one knows the future. Just ask all the people who are underwater today.

By: Jason @ onemoneydesign

Jason @ onemoneydesign — Wed, 21 Jul 2010 16:38:42 +0000

I think some of the discussion may have gotten off-track on the main point I was trying to make. I ask the question – Good debt? And provide what you might most commonly hear as a response to a car loan, home loan, etc. The bottom line – I think they are all debt and debt isn’t really a good thing for people (in my opinion). The question we should be asking is – how can we avoid going into debt for common things and certainly credit cards? Car loans, home loans, etc. have become the norm. Again, I couldn’t discourage someone from a home mortgage (I have one), but I sure would like to see people avoid excessive loans and possibly save while younger to put a lot more down and limit what they owe. I would love to see a change to interupt the normal view point that it’s okay to have a home loan, etc. and see people truly motivated to avoid them (or at least as much of a loan as possible) by saving more and preparing earlier in life.

By: Randy

Randy — Wed, 21 Jul 2010 15:28:22 +0000

Greg said “Houses in your area reduced in value over the last couple of years, so yes, let’s paint all of human history throughout the world with the same brush. If you think houses are now a poor investment, can I make an offer on yours?”

I think you missed the point. I’m certainly not saying that all houses are a poor investment, only that some are a poor investment and it’s difficult to know up front. We shouldn’t assume that any house will only go up in value. A house is a place to live. If we can pay it off or pay it down, then when we move to another house, we increase our chances of equity.

As for making an offer on my house, you’re certainly welcome to contact me. My house was on the market last year, and we pulled it off due to lack of interest. I could sell it to someone who views it as an investment and is looking for a bargain, but I elected to stay and hope for better days. I guess I’m protecting my own investment.