Your credit is limited
According to a press release from the Credit Ombudsman, about 10,26 million people has accounts that are three months or more in arrears.
Customers who would usually qualify for loans and increased credit, may now face rejection when applying for the first time.
In a press statement released by the Credit Ombudsman, it was stipulated that there were people who struggled to repay existing credit agreements and were still granted new credit. This will no longer happen.
Economist Dawie Roodt says he disagrees with the implementation. ‘It is trying to show that the bank is responsible and consumers are not and I think the state should not legislate how consumers act. Everyone is responsible for their own actions,” he said.
According to Roodt, the new law will limit loans and consumers will not learn how to be responsible with regards to their money.
When the Record asked Roodt if it will be difficult for consumers to open clothing accounts while you have are in debt, he said he was not sure. “I think when you apply to open a clothing account and you fill out the application form, you will have to be honest about your financial status.”
Francois Stoffberg, also an Economist, gave a few tips on how consumers can better manage their money.
• Do not spend money you do not have.
• First spend your money on necessities and only after you have saved some money, should you spend it on luxuries.
• Let saving money be your first priority.
• Draw up a budget and stick to it.
• Consult a financial advisor about managing your wealth.
The new law requires certain procedures when applying for a loan or anything similar.
Part of the procedure you will undergo is:
1. Your latest three months pay slips or bank statements which should reflect three salary deposits.
2. Proof of income
3. Latest financial statements
4. You have to be working for more than three months
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