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 Tax implications for capital gains

Capital gains do give rise to tax implications. We approached an expert to find out what these are.

Preparing your domestic staff for leaving your employ

We found out what measures you should take in order to ensure your domestic worker is financially secure after they leave your employ.

Can you monetise your hobby?

As with most hobby enthusiasts, you likely have spent many hours developing unique skills to perfect your passion. However, have you considered getting paid for this effort as well?

What are the interest rates on store accounts?

Opening a store account is one of the easiest ways to build your credit score. Not surprisingly, a recent report by the National Credit Regulator (NCR) found store accounts to be among the most popular credit types for South African consumers - and demand for them is growing

Deals

Thursday Prawn Special at Blowfish Restaurant

Price: R125
When: Thursdays
Where: Cape Town

Tonsorial Gents Cut and Style Deal

Price: R300
When: Tuesdays to Saturdays
Where: Cape Town

Pedicure Spring Special at Shambala Spa

Price: R390
When: Mondays to Fridays
Where: Gqeberha


Latest Guide

Guide to debt rehabilitation solutions