Be informed when it comes to debt

With South Africans going through financial woes, many will have no choice but to borrow money in order to stay afloat.

Many of these people end up incurring debt that escalates to amounts that they cannot repay.

In an attempt to help people manage their debt and credit usage, here are a few rights and tips from the National Credit Regulator (NCR) …

General tips from the NCR:

• Know your financial status
• Know all your creditors – create a spreadsheet of all your accounts/debts as well as monthly expenditure
• Have a spending plan and stick to it
• List all your expenses such as rent/mortgage, water/electricity/rates, grocery, transport, school/crèche fees, medical expenses (if not on medical aid), insurance, bank charges (estimate, based on the statement)
• Compare your total monthly income with your total expenditure.

How to manage your credit:

• Do not ignore your debt, make plans to resolve your debt issues. Also be aware of your rights when it comes to debt and credit
• Prioritise and pay your debt, give priority to all debt that has high interest rates. Try to cut down on your expenses and luxuries to afford to pay off your debt
• Avoiding borrowing to pay off debt. Do not incur more debt trying to pay off existing debt
• Cut down on your expenses. Eliminate all unnecessary items from your budget. Start doing the things that you used to pay people to do, and use that money to pay off your debt
• Start saving. Once you receive your pay, move money to a savings account and rely on the money to help out with unforeseen emergencies.

Credit rights. You have the right to:

• A credit agreement in plain language that you understand
• A quote and pre-agreement statement, binding for five days
• All relevant information included in the credit agreement and cost
• Feedback on why your credit application was unsuccessful
• One free credit report per year
• Assistance when overindebted in the form of debt counselling.

For more tips, you can go to: https://www.ncr.org.za/ncr-departments/education-and-communications/consumer-tips