When to use credit

Is it ever okay to borrow money? Based on the Scriptural Financial Freedom principles, it may seem that borrowing is always a bad idea. There are times, however, when using credit cards is both acceptable and even necessary.

Using credit can actually be a wise financial move. For example, imagine a family that needs school books for the children's education. They do not have the money for school books today, but they will within two weeks when dad's paycheck comes. Using credit to acquire them makes good sense as long as they make the funds available to pay off that credit card balance.

A home mortgage is one of the most common use of credit that most Americans point to as being justifiable and even sensible. In times of appreciating property values or exceptionally low interest rates, that might be a good idea. Buying a home does make good economic sense, even if you have to take out a loan to make the purchase.

In times of economic crisis, however, assuming such a large debt may not be wise. Can you, as a homeowner, handle the stress associated with a plateau - or even worse, a drop in the value of your home? Can you continue to make monthly payments if you loose you job?

The main question you must ask yourself before buying a home is "How much economic crisis do I expect to see?" A little patience may help you to take advantageof an underpriced and oversupplied property market.

Today's Bottom Line

The decision to take credit must make economic sense. Check your motives before going into debt. Are you rushing into an uncertain financial commitment? The greater the debt, the greater the stress.

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