This Chapel at Northwestern segment features Rachel Cruze speaking on having debt and building credit. Rachel is the daughter of well known financial expert Dave Ramsey. She travels and speaks to college students about finances and stewardship.
Rachel delves into the issue of debt.
“The reality is is that the average college student is graduating $27,000 dollars in debt. Before they even start life, they’re in a hole.”
Young people are okay with the idea of having debt. Having debt isn’t unfortunate or sad, it’s normal. This mindset, Rachel explains, is unbiblical because every time debt is mentioned in the Scriptures it’s mentioned in a negative light.
“Is debt a sin? No. Is debt a salvation issue? No.”
However, choosing to not live in debt is following the better road that God has laid out for us. If we live in debt we’re listening to myths according to Rachel.
Myth: You need a credit card. You need a credit card for emergencies, right?
Rachel disagrees. Often students or young people will get a credit card just for emergencies. The problem is that life, especially the life of a young adult is filled with minor events that can seem like emergencies at the time. It’s far to easy to rack up debt paying for “emergencies” that didn’t need to happen.
Myth: You need to build your credit score. You can’t live life without a good credit score, right?
Again, Rachel disagrees. She explained that credit scores are calculated by analyzing the type of debt, length of time in debt and current debt that a person has. Basically, to have a good credit score, you have to be in debt and in debt for a long time. She also pointed out what credit scores are used for: getting into more debt.
Rachel explores tips for avoiding and getting out of debt in the rest of her speech.
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