The National Credit Regulator has urged consumers to take into consideration the rising cost of living when they splash out this festive season.
The total number of civil summonses issued for debt increased by 11,1% in the third quarter of 2022 compared with the third quarter of last year according to data released by Stats SA last month.
Many consumers are still servicing high levels of debt and the regulator is calling for more responsible usage of credit.
According to National Credit Regulator (NCR) Relations Officer, Didi Segawane rising interest rates, higher food, fuel and energy costs are pushing more consumers into debt.
Responsible credit use
The regulator is urging consumers to be more cautious with their money this festive season.
“Those who are lucky enough to receive 13th cheque or bonuses always remember the golden rule pay your debts first. Avoid using credit for consumption purposes like alcohol, groceries and other unnecessary items on credit.”, Segawane stresses.
Segawane further adds that,”They should know that credit comes at a cost and they should know that at the end they still need to pay costs associated with credit. Consumers who are struggling to keep up with their monthly repayments of bills, avoid taking more credit during festive season.”
South Africa’s average consumer has almost 30 percent more unsecured debt such as credit cards and personal loans, than they did a decade ago.
People take debt to make up for effects of inflation and increasing cost of living.