SOUTH Africans have been warned to brace themselves for tough times this year.
Debt Rescue chief executive Neil Roets said major price increases are predicted for food and essential items due to the slow economic growth rate.
Roets said their statistical analysis of the debt situation in South Africa showed consumers would notch up record levels of debt this year.
“It seems sad that we have to be so pessimistic, but the sooner consumers realise that the economy is in trouble and tighten their belts, the fewer of them will have to come to us to bail them out by placing them under debt review,” Roets said.
Many South Africans who barely make ends meet during the year have plunged themselves ever deeper into debt over the holiday season by spending money on expensive holidays and generally having a good time, often on their credit cards or with money borrowed from money lenders at exorbitant interest rates, according to Roets.
He said experience over time had shown that Januar y was the month of “the great reckoning”.
“We see more new clients seeking help with the repayment of their outstanding debt in Januar y and February than any other month because of additional debts stacked up during the holiday season.
“Parents suddenly realise they have to pay school fees that had not been budgeted for, and with credit cards maxed out on luxuries in November and December, many have no choice other than to seek relief by going under debt review to prevent debt collectors from seizing their property,” he said.
“Bear in mind that the interest rate on credit cards is substantial, so wherever possible, buy cash.
Roets warned that 2018was going to be a tough year and that consumers who had had difficulty making ends meet last year we’re going to find it even more difficult to do so this year.