Credit Card Debt

Credit cards provided by the banking industry are an emerging source of household credit in the Philippines. Based on the results of the nationwide “Consumer expectations survey” conducted by the Bangko Sentral ng Pilipinas (BSP) for the first quarter of 2008, about 3% of the 5,000 sample household respondents have a credit card and around 4% expect that a household member will apply for a credit card within the next 12 months.

Based on the data in the banking sector’s reports, the total credit card receivables outstanding of universal/commercial banks and thrift banks, inclusive of credit card subsidiaries, reached PHP 116.1-billion at end December 2007. 14.2% of which or PHP 16.518-billion was past due as of December 2007.

The trend in past-due credit card receivables could mean that more credit cardholders are having difficulties making their payments on time. Accounts that were more than six months overdue came to PHP 6.858-billion. The rate of consumer credit defaults in the Philippines is almost triple the average in Asia.

The CIA Factbook estimates the population of the Philippines at 88.57 million as of August 2007.  If 3% of the household have credit card, then the number of credit card holders in the Philippines as of the same date is estimated at 2.66 million.  And the average credit card debt is PHP 43,647 per Filipino credit cardholder.

What’s Wrong with Credit Card Debt?
The Bible offers many warnings about debt, but it never says that borrowing money violates God’s commandments.  It may, however, be unwise to do so.

Carrying credit card debt violates two biblical principles.  First, debt presumes upon the future (James 4:13-15).  When we use credit card debt, we assume money will be available to pay off the debt in the future.

Second, using credit card debt may deny God an opportunity to provide.  Isaiah 55:8-9 says God’s ways are not our ways, that His plans are higher than ours.  We we use credit card debt as a quick solution, we effectively deny ourselves the opportunity to let God meet our needs.

Financial choices and predicaments are always symptomatic of other issues.  Some of the common issues that leads to credit card debt include a lack of contentment, a lack of self-discipline, the search for security, and the search for significance.

God wants us to be obedient to His commands, but He also wants us to be wise in how we live.  Ephesians 5:15-16 says, “Therefore be careful how you walk, not as unwise men but as wise, making the most of your time, because the days are evil” (NASB).