Consumers urged to manage their debt

KNOWING how much you owe and re-adjusting your budget in order to meet your monthly repayments, will help ease the stress of debt this year.

This is according to the National Credit Regulator (NCR) which is sharing valuable tips on spending and borrowing wisely.

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‘This is the time to seek assistance by negotiating for lower instalments with your current credit providers, paying off and closing some accounts.

‘It might be possible if you downgrade your lifestyle, especially during a time when you are battling financially. Assess your budget to check what you can eliminate and that which you can downgrade,’ says Anne-Carien Du Plooy, Acting Manager: Education and Communication at the NCR.

She warns consumers to avoid unregistered credit providers to access credit.

‘Unregistered credit providers charge exorbitant interest rates and use other illegal collection mechanisms such as card retention.

‘Remember the festive season has come and gone and you are still here, so make the best of this year by spending and borrowing wisely. Save for the future as there is no better time like now,’ said Du Plooy.

Tips for consumers:
Understand the cost of credit – To understand the cost of credit, consumers should be given a pre-agreement statement and quotation (valid for five business days). These should disclose all the costs involved in the credit agreement that a consumer signs.
Do not sign a blank credit agreement/document- read the content first, understand and ask relevant questions. You may sign only when satisfied.

Be honest and truthful when applying – If you are dishonest about your monthly expenses when applying, you will lose the protection offered in the National Credit Act if you need to raise reckless lending in the future.
Borrow only when it is absolutely necessary to do so
and avoid using credit for consumables such as groceries.

Understand credit life insurance – Credit life insurance can be a lifesaver when you cannot repay the debt for reasons such as loss of income, unemployment, disability etc.

Pay your debts on time – Paying late or not paying the full instalment will negatively affect your credit report and in turn your ability to qualify for credit in the future. If you think you cannot meet your monthly instalments, contact your credit providers immediately and try to re-arrange payments. Do not wait until you skip payments.

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