From ScriptureCatholic.com

Ephesians 2:8-9 – grace versus works
Zack: Ephesians 2:8-9 says this (according to New American Bible "The Catholic Youth Bible" revised):
"For by grace you have been saved through faith, and this is not from you; it is a gift of God; it is not from works, so no one may boast."
How can one be saved by good works if the Bible clearly says here that one is not saved by works but by faith alone?
I'd just like to know what you think.
Thank you,
Zack
J. Salza: Zack, many people don't understand Ephesians 2:8-9. In this passage, Paul says we are not saved by works. But James says that we ARE saved by works and not by faith alone in James 2:24. Is there a contradiction? No.
The difference is that Paul and James are talking about two different kinds of works. When Paul speaks of works, he is generally referring to "works of law" (read also Galatians) which refer to works done under the Mosaic law. The Jews believed that they still had to perform their ritual works to be saved (e.g., circumcision). In Acts 15, Peter declared that circumcision was no longer required for salvation. We are saved by grace, not works. When Paul refers to "works," he is also referring to any type of work where we attempt to obligate God and make him a debtor to us. The Jews were attempting to do this in their rigid system of law.
Paul is teaching that, with the death and resurrection of Christ, the Father has invited us into the system of grace where we now can have a gracious relationship with God. We are saved by grace through faith in Christ, not works of law. However, once we transition from the condemnation of the law into the system of grace (Rom 5:1-5), we must add works to our faith. We are not justified or saved by faith alone (James 2:24).
Thus, there is a distinction between "works of law" and "good works." The former are done in a system of law which cannot save us, and the latter are performed in a system of grace by which we are saved. If we approach God with faith in Christ that He is our Father and will reward us not because He is obligated but out of His sheer benevolence, we please Him in a system of grace and He will save us. If we approach God impersonally and try to obligate him to reward us for our works, He will condemn us. The distinction is "law" versus "grace." This permeates Paul's teaching on justification.
I recently send this short analysis to another of my patrons:
Here is the critical issue that you must understand: there are works in a system of law, and works in a system of grace. When we do works in a system of law, we stand condemned. That is because in this system, we try to obligate God like an employer. But there is nothing we can do to merit any payment from God.
When we do works in a system of grace, they are profitable to our salvation. That is because in a system of grace, we approach God as a Father who loves us, not as an employer who owes us. We move from a system of law to a system of grace through faith in Jesus Christ (Rom 5:1-5).
That is why Paul says that we are not "justified by works of law." He is referring primarily to the Mosaic law (e.g., circumcision) or any work where we try to obligate God. This is to be distinguished from works performed under the auspices of grace. There is a difference between "works of law" and "good works." This is why James says that a man is justified by works and not by faith alone (James 2:24).
Paul's teaching that we are not justified by works of law and James' teaching that we ARE justified by works appear to be inconsistent with each other, until you recognize that they are talking about two different systems: law and grace.
Grace be with you.
John Salza
Zack: Thank you for your quick response. I'm a Catholic, but I attend a primarily Free Will Baptist school (though other denominations are present). They teach in their Bible studies that one must trust Christ with their life and believe in Him, and then after you've "been saved" you should have the desire to do good works and follow God's law but that they aren't required to get into heaven. They teach that good works are to lay up treasures in heaven for us to enjoy when we get there by believing in Christ.
They also suggest that people who believe that good works are necessary to enter the kingdom of God are hypocritical... and that they are like the Pharisees who Christ compared with a grave -- looks nice on the outside, but all that lies inside is a rotting corpse because they only do their works to impress the people watching them. That's what I've heard all the time at school, so that's why I was wondering what you thought.
They never bothered to mention James 2:24... I never knew the Bible said anything like that.
Thank you again for the info!
Zack ..........

................The Bible never says that we are saved by "faith alone" and that good works just automatically flow out of believers. It says just the opposite. The New Testament was written primarily for true, genuine believers who were being warned not to fall away from the faith. There is nothing about "once saved, always saved" anywhere in Scripture.
Neither faith nor works can save us outside of God's grace. But once we accept Christ with faith and move into a system of grace, we must add good works to our faith in order to be justified. James tells us so. So does Jesus. The good works are not automatic either. We must make a conscious effort to do them. We can also refuse to do them, even though we still believe in Jesus. Make sense? Faith and works are two different things, and they must be coupled together to procure justification. In fact, Jesus Himself said "by your words you will be justified, and by your words you will be condemned" (Matt 12:37). Jesus is saying that even our words can justify us or condemn us. Jesus looks at our actions, not just our faith.
Regarding Romans 3, if you read that section and also read Paul's letter to the Galatians, you see how Paul is emphasizing "works of law" in reference to the Mosaic law or any type of work where we try to obligate God. These works have nothing to do with the good works that James requires in James 2:24.
God bless.
John Salza

Mr Salza goes on and describes more on his blog if you care to read it.
Again I must state that I am describing what the Catholic Church teaches and what I BELIEVE. If you do not agree with me or my faith I am sorry but we will have to agree to disagree. My mind will not be changed and I do not expect to change yours, what I do expect is so me understanding and less of being told that Catholics do not get the real truth. We do get it, the Truth that we have is just from a different interpretation of the Bible. That is why I am Catholic and stay Catholic, that is why when I had a crisis of faith and thought I might become Baptist I returned to the Catholic Faith , because I believe what the Church teaches! I believe in the Catholic interpretation of Holy Scripture. I am not saying that Baptist are wrong or not saved I am just saying I do not believe what you believe about works & faith for salvation. I also believe through the GRACE OF GOD one is saved plain and simple without that Faith, Works and anything else is of no consequence.
Please read my quote from