DEEPLY indebted consumers should not sway from their budget by taking on unnecessary debt on goods they don’t need this festive season.
This was according to Neil Roets, the chief executive of Debt Rescue, who said indebted consumers already owe more than R1.71 trillion in outstanding debt. Roets said many consumers had already maxed out their credit cards and store cards during last month’s Black Friday and Cyber Monday sales and were now thinking of borrowing money in the form of unsecured loans to fund their Christmas spending.
“Loans have to be repaid, mostly at very high interest rates, and there are substantial expenses waiting down the road in January and February.
” He said South Africa had just received two downgrades from rating agencies, which was going to further push up interest rates on borrowed money, and would also impact on the economy with slower growth as low as half a percent this – year and further unemployment.
“Those of us lucky enough to still have jobs may not have them for very much longer, because with very little foreign direct investment coming into the county, it is unlikely that next year will see much of an improvement in any of the major financial indicators,” said Roets
“We know for sure inflation is on the rise and there is definitely going to be a substantial increase in the price of fuel, perhaps by as much as 40c a litre. Red meat, chicken and eggs are already on the rise and … the price of eggs… is going to increase substantially.”
Roets said things were going to get a lot tougher before they got better.
Aasiya Jamal, Al Baraka Bank’s senior manager for transactional banking and customer service, said that with the onset of the summer holiday season, the bank had urged people not to over-extend themselves financially.
Rudolf Mahoney, the head of brand and communication at Wesbank, said during the festive season, many people and families went on holidays away, which could result in high, unplanned costs.