Interest rate pain finally delivers a gain as credit growth hits brakes
By Ethel Hazelhurst
Johannesburg - Confirmation came on Friday that the 4.5 percentage point rise in interest rates over the past two years is finally yielding results. Data released by the Reserve Bank showed that credit growth slowed sharply over the 12 months to April. Over the past few months, the declining trend is reflected most clearly in credit extended to the household sector.
Credit growth is finally slowing. The tough measures instituted appear to be showing their effect. If credit growth is slowing more people are looking to consolidate their debt, or to seek debt management. Rather than just take a new credit card, consumers can transfer their balances to a new lower interest rate. Personal loans can be used to lump all your debt into one sum, with the chance to negotiate a lower interest rate. However, the upturn is not here yet, things will get worse before they get better again.