Guiding consumers since 2009

State of the credit card nation

By Staff Writer
The Reserve bank is where the money comes from. They lend to the commercial banks at an interest rate set by the Reserve Bank and known as the Repo rate. This currently stands at 7%. The commercial banks then lend to the public that money they borrowed from the Reserve Bank. The Bank releases monthly data on lending and credit and the latest data shows that credit extension like short term loans are down but credit card purchases are up.

 

  • Credit extension grew slower by 0.51%
  • Credit card spending rose by R 259 000
  • Cash credit advances are down

 

The credit crunch and the previously prevailing high interest rate environment have caused less credit to be available. The latest figures show that as consumers are feeling the pinch they are turning to credit in order to meet their obligations, as less of this credit is extended, credit cards are being used more frequently to offset what may have been before covered by a short term loan. Credit extension however is still growing at 4.34%.

In a recession it can be very dangerous to rely on credit to meet your obligations and could land you in a credit trap. If you are struggling firstly plan your budget then cut back what you can and as a last resort look to a credit instrument to tide you over. Credit cards if managed properly can be very cheap to use but require that you pay them back in full promptly every month, if not you pay interest and will find it harder and harder to pay that debt.

Recent Articles

Featured Times are tough, but keep your debt under control

While the whole world is going through a rough patch, you may also be feeling the pinch. With the country in crisis, it may be difficult to keep up with your debt instalments. However, abandoning your debt obligations is not the solution.

Debt Series Part 2: Interest rates - unpacked

In the second part of our Debt-ucate series we explore interest rates –from how to get a better rate to what influences it, and how this affects the cost of your debt.

Debt counselling – the two sides of the coin

Being overindebted doesn’t just put a strain on your personal finances; it also puts a strain on your state of mind. The best solution is to start the process of debt counselling so that you can escape the debt cycle. But what are the ups and downs of joining this debt relief programme?

Travel ban – how to claim for the loss incurred

As with the recent Covid-19 pandemic, governments sometimes issue travel bans to prevent people from travelling to other countries. This becomes even more complicated if you’ve already planned and paid for your trip. Your flights will be cancelled, and you may lose money from cancelled accommodation arrangements. How do you claim for the financial losses incurred due to a travel ban?

Deals

Get 30% back when you fill up with your Absa card

Price: Available on request
When: Daily
Where: Nationwide

Get 50% back in eBucks when you apply for an FNB home loan

Price: Available on request
When: Daily
Where: Nationwide

Get 50% off your online fees when you pay with Capitec card

Price: Available on request
When: Daily
Where: Online