A Pepper Grinder Post

Heads or Tails

One of my sons told me an astonishing fact the other day. He heard that there are more payday loan stores in the U.S. than there are McDonalds and Starbucks put together. To be honest, I was skeptical. I thought he had heard wrong or that someone was exaggerating the facts. So I looked it up myself. I went to , which without a lot of hyperbole, gives the facts about the number of payday loan outfits and the number of McDonalds in each state. I was stunned. In spite of the fact that there are NO payday loan stores in 9 of the 50 states (because charging the level of interest demanded by these outfits is illegal in those states), there are still around 23,417 payday lenders in America, as opposed to 12,401 McDonalds.

payday loan storeIn case you aren't familiar with payday loan stores, they often seem to be found in strip malls in poor areas. Yesterday I did an informal survey when I got milk on my way home from work. I passed FIVE of these in my town (plus a couple of pawn shops), but only one McDonalds. (The town I live in has a population of around 7,000, and I know that the McDonalds I passed is the only one in town, but I would not be at all surprised if there were another one or two payday loan stores.) Most I have seen have a sign with very large letters saying something like, "GET CASH NOW." I have never frequented one of these establishments, but my understanding is that they specialize in short-term loans with very high interest rates. The idea is that people who couldn't get a loan from a bank can go to a payday lender and get the $200 they need to pay the electric company to keep the lights from getting turned off. In a week or two, when they get a paycheck, they can pay the loan back (hence the term, payday loan). Another variant of this is to take out a loan using something like the title to your car as collateral. You might pay something like $40 a week to borrow $200 (which comes out to close to 1000% annual interest), but for the borrowers, the alternative of not having the money is worse.

I could talk about the predatory practices of these lenders and how un-Biblical it is, and that is absolutely true. In the Old Testament, the Jews (at least when loaning to fellow Jews) were forbidden to charge interest (Exodus 22:25) and when the year of Jubilee came around every 50 years, guess what happened to those debts? They were all cancelled. Jesus went even further in the Gospel of Luke and commanded his disciples to lend without expecting to get anything back (which sounds like a gift to me).

What I wanted to talk about, however, was the national attitude toward debt that allows payday loan companies to flourish. When my wife and I were first married, we believed that the Bible forbade us ever to borrow money for any reason. Although we now feel that debt should be avoided but is not absolutely forbidden, I have to say that living without debt was (and still is) a wonderful thing. It was wonderful, because it forced us to live within our means. We assumed that we would not own a house our entire lives because we knew we would never be able to pay cash for one. Sometimes we went without any car at all, and we never bought a new car because we always paid cash. We were forced to live in the present with what we had then and to save up for things we wanted in the future. This gave us a kind of freedom that was immensely good for us in all sorts of ways.

payday loan signAlthough I don't think the Bible prohibits debt in a legalistic way, I do think the Bible has clear teaching about the undesirability of going into debt. One of the places this is found is in Deuteronomy. Here God laid out for the Israelites the benefits of following him and the penalties of refusing to follow him. The passage is striking, in a melancholy way, because later in the Old Testament we can read about how so many of the things happened that God had warned the Israelites about should they reject him. For this post, I'm especially interested in the parts of the passage that relate to debt.


The LORD will open the heavens, the storehouse of his bounty, to send rain on your land in season and to bless all the work of your hands. You will lend to many nations but will borrow from none. (Deuteronomy 28:12, NIV)


The alien who lives among you will rise above you higher and higher, but you will sink lower and lower. He will lend to you, but you will not lend to him. He will be the head, but you will be the tail. (Deuteronomy 28:43-44 NIV)

In a set of books that laid out many prohibitions, Moses does not tell us that we must never borrow or lend. What he does do is make it abundantly clear that being in debt is a misfortune or even a curse. The lender is pictured as the head while the borrower is the tail.

payday loan signBut do we treat loans like that? It certainly doesn't seem like it. Buying cars with a loan is so common that the price on the windshield in a car lot is usually the monthly payment rather than the asking price. How many people do you know who own their homes free and clear? How many growing churches do you know that don't have a mortgage? How many students go to college without borrowing against the money they presume they will make after college?

I'm not trying to make anyone who is in debt feel bad. The passages above present debt as a misfortune rather than a sin. What I want to do is encourage people to avoid getting into new debt or going into it more deeply. It is so easy to convince yourself you MUST have something you don't have the money for right now, but I think that in many of these cases, we could think of creative solutions or just live with inconvenience if we knew borrowing was not an option. As someone who is currently debt-free and has lived most of my life without debt, I give my opinion that the short-term challenges of not having cash are far outweighed by the freedom of not owing money to anyone. Here are a couple of made-up (but not far-fetched) examples of how being in debt can limit your freedom.

Tom is a serious Christian. He has dreamed of being a doctor since he was small. He is now in medical school. He likes the idea of being the kind of general practitioner who really listens to his patients and is approachable. Recently, however, he saw a presentation about medical missions. He was filled with a longing and excitement to go and help the poorest of the poor, to treat diseases that people are dying of but which could be easily treated, rather than trying to establish a foothold in the glutted market of U.S. medicine. A few days after the presentation, he realized with a start that he could not possibly be a full-time medical missionary unless he first paid off his college student loans plus the over $165,000 he would owe by the end of med school.* He is starting to consider giving up his idea of being a GP and instead is thinking about going into some lucrative specialty. Maybe after 10 or 20 years, if everything goes well, Tom can pursue his dream of healing the poor.

Chris and Tabitha are also serious about the Lord. They met at a Christian college. Although Tabitha studied accounting, her dream is to be a mother. Her own mother had always worked, and Tabitha longs to be there for her kids as they grow up. She recently talked to a woman in her church about home education and was starting to get excited about the idea. But when she talked to Chris about quitting her job so they could start a family, he looked concerned. Nothing would make him happier, he assured her, but he reminded her about the mortgage and student loan payments they had to make every month. (A Christian financial counselor had recommended that they buy a home rather than renting, so the money they paid each month would be building up equity rather than just "going to waste." coinThey had found a fairly modest home which would have mortgage payments only a few hundred dollars a month more than they were paying in rent. They soon discovered, however, that between home insurance, property taxes, and upkeep on the house, owning a home was quite a bit more expensive than renting had been.) Chris held her, and assured her that maybe in a couple of years, if he got promoted, she might be able to cut back to part-time.

I can picture someone saying, "Amen, brother. Debt is a bad thing. I wish I could avoid it, but I have no choice." If you feel that way, I would encourage you to look closely at how you are handling your money. Are your ideas of what is possible or practical based on how people around you live? Have you ever considered making radical changes to your lifestyle to become debt free? I am sure there are times it would be very hard to avoid debt. But there are also times you have a choice. Will it be heads or tails?


*According to , the average medical school debt in the U.S. in 2013 was $166,750