Controlling Debt
The Financial Stewardship Series
Controlling Debt
By Dr. Gerald House
Do you remember the influential commentator and radio broadcaster Paul Harvey? I realize I might be dating myself, but I loved listening to him on the radio in the late 70s and 80s. He was well known for his storytelling, especially for the historical accounts he shared alongside his latest news commentary. He had a talent for keeping listeners captivated until the very end, when he finally revealed the name of the person or event. He aptly named it “The Rest of the Story.” He was one of the best storytellers of his time. Stories remain a very important way to communicate a message to an audience. Below is a story that highlights the importance of “behavioral finance” in our lives.
In 1896, the Sperry & Hutchinson Company, founded by Thomas Sperry and Shelley Hutchinson, launched an innovative customer loyalty program for retailers to attract and retain customers. For each purchase at a participating retailer, customers earned stamps—one stamp for every ten cents spent. They collected these stamps and pasted them into a dedicated booklet for the program. Later, once a customer had gathered enough stamps, they could redeem merchandise from a redemption center set up for this purpose, either in person or through a catalog. The program didn't become widely popular until the 1950s and 1960s. At its peak, there were over 800 redemption centers nationwide. Families saved these stamps to buy merchandise they normally couldn’t afford or didn’t want to spend money on from their budgets. The redemption program highlights the virtues of patience and waiting for something valuable, contrasting with the instant gratification of today's overuse of credit cards. Naturally, the stamp program was a precursor to today’s credit card rewards, airline miles, and grocery store loyalty points like those used by Kroger and other retailers. The program influenced customer behavior and proved highly effective as a marketing strategy. We remember it as “S&H Green Stamps,” and now you know “the rest of the story”.
Like the S&H Green Stamp program, credit card companies have made millions by rewarding loyal customers with points for vacations, travel, and more. However, unlike “S&H Green Stamps,” where you buy items needed for your home, such as food and household supplies, from the income you've earned, credit cards let us purchase things we haven't earned enough income to buy, thus mortgaging our future for today's pleasures and paying more in interest for the convenience. Moreover, not only are we spending more to satisfy our desires, but we are also misled into thinking we get something for free through reward points. Of course, people don't realize that the cost of these loyalty programs is built into the retail price. This isn't "free money." You can't justify spending solely based on the rewards it offers. Still, we're often deceived by clever advertising designed to drain our pockets. Behavioral finance continues to greatly influence our cash flow and savings habits.
The Bible teaches us that debt is a form of servitude (Proverbs 22:7), and if we find ourselves in debt, we should work to free ourselves from it (Romans 13:8). The Bible also warns against co-signing a debt for anyone (Proverbs 6:1-5, Proverbs 17:18, Proverbs 22:6, and Proverbs 27:13). Although debt itself is not a sin, God never intended His people to enslave themselves to debt. He wants us to be free from burdens. Ron Blue states that borrowing may prevent God from blessing you. Additionally, he believes borrowing assumes the future and always signals a deeper spiritual issue. I agree. Having a consumptive mindset will ultimately lead to a lower standard of living.
In this series, we explored the concept of financial stewardship by comparing the patient, disciplined approach of traditional loyalty programs like S&H Green Stamps with the instant gratification promoted by modern credit card rewards. It emphasizes how behavioral finance influences spending habits, warns about the hidden costs of "free" rewards, and discusses biblical views on debt, advising readers to avoid heavy borrowing and work toward financial freedom. Take some time to reflect on your attitude toward debt from a Biblical perspective. Is debt preventing you from living a burden-free life as God intended? If so, let’s address these issues.
Your faithful servant
