In my opinion one of the most critical distinctions to make between Protestantism and Catholicism is what is meant by “grace”, especially in regards to Justification. Once this is understood issues like “Justification by Faith Alone” will make sense.
Here is an rough example describing how Justification takes place with Protestants and Catholics:
Lets pretend God is an accountant and He is Managing a bank. Man is a member of that bank, but due to some poor decisions on their ancestors’ part, each man inherits a personal account that is in astronomical debt. In order to be an good citizen you must somehow settle this debt with the Manager. Then one day a Billionaire named Jesus comes to town and out of the kindness of His heart is willing to settle any debts, as long as the person asks politely.
Now, here is how a Protestant would describe getting out of debt (Justification) according to the above example. The Billionaire would have the Manager consider the Billionaire’s account instead of the debtor’s account (Imputed Grace), and on that basis consider the debtor “debt free” (though his own account is still in debt).
A Catholic would reject that notion on the simple fact that the debtor is STILL in debt and thus cannot rightly be considered “debt free”. Rather, with the Catholic understanding the Billionaire’s funds would be applied directly to the debtor’s account (Infused Grace), making the debtor truly debt free, at which point the Manager recognizes the now debt-free customer for what he is, debt-free.
Just in case Protestants think I am misrepresenting them, here are two important quotes from Reformed and Lutheran creeds:
I. Those whom God effectually calls, He also freely justifies; not by infusing righteousness into them, but by pardoning their sins, and by accounting and accepting their persons as righteous; not for any thing wrought in them, or done by them, but for Christ’s sake alone; nor by imputing faith itself, the act of believing, or any other evangelical obedience to them, as their righteousness; but by imputing the obedience and satisfaction of Christ unto them, they receiving and resting on Him and His righteousness by faith; which faith they have not of themselves, it is the gift of God.
-Westminster Confession of Faith, Ch 11 (Reformed)
12] Therefore we reject and condemn all the following errors:
15] 3. That in the sayings of the prophets and apostles where the righteousness of faith is spoken of the words justify and to be justified are not to signify declaring or being declared free from sins, and obtaining the forgiveness of sins, but actually being made righteous before God, because of love infused by the Holy Ghost, virtues, and the works following them.
-Epitome of Concord, Ch 3 (Lutheran)
The above two quotes should be pretty clear regarding the Protestant understanding of Justification, the debtor’s own account is simply not considered and instead the Manager considers the Billionaire’s account.
Catholics see the Protestant understanding of Justification to be an abomination because God is considering something other than what it TRULY is. It is like slapping a name tag on someone that says “righteous” knowing all along the person is actually not righteous.
Any questions or comments?