IOL reported that the average South African carries around R16,481 in credit card debt. But considering current economic conditions these numbers may be a lot higher. Debt Rescue conducted a study that found 85% of South Africans are in financial stress due to covid-19. Due to their current financial situation, South African consumers are relying on credit cards to help them get through the month.
Here are 6 signs that your credit card spending is out of control.
1. You don’t know what your credit card balance is
If you don’t know what your credit card balance is, it is a clear sign that may be heading to financial trouble. If you’re not careful you may overextend your credit without even realising. It’s easy to lose track of how much you’re spending if you don’t check your balance frequently.
It’s important that you get into the habit of checking your balance weekly to ensure that you’re not overspending.
Use your banking app to help you track this more closely.
2. You credit card statement stresses you out
You should be concerned about your financial situation if you’re feeling stressed about your credit card statements. If your credit card statements do stress you out, it’s because you don’t know how much you’ve spent. That is often a clear sign that you may not be in control of your spending.
If your budget and spend correctly there should be no reason for you to feel stressed out.
Try to get rid of that credit card debt before using it again. If you continue to use your credit card you could end up in a vicious cycle which will be very difficult to get out of.
3. You’ve maxed out your credit card
If you find yourself frequently maxing out your credit cards, it should raise alarm bells immediately. This is a clear sign that you’re overspending and that you don’t have enough money to support your spending habits. The worst thing you can do in this situation is to apply for a second credit card.
Getting a second credit card will only make things worse.
Instead of spending more money that you don’t have, pay off the debt you’ve made and start from scratch.
4. You don’t look at prices when you shop
If you’re making purchases without looking at the price first, you’re on the fast track to overspending. If you are doing this, you probably don’t have a budget in place and you’re spending much more than you should. And worst of all, you are not in control of your financial situation.
Make it a habit to look at the price of any purchase you make. It will help you stay in budget and prevent overspending.
5. You don’t know if your card will be declined
When this happens, it’s not only embarrassing but it also shows that you don’t know what your financial situation looks like. This is a clear sign that you may be in trouble.
To prevent this from happening check your credit card balance before going to a store.
6. You can’t afford to pay off your current credit card debt
If you can’t afford to pay off your credit card debt you’re in serious trouble. If you’re only paying the minimum repayment on your credit card you’ll be in debt for much longer than you’ll want to be. Which will hurt your financial situation in the long run?
You always want to pay more than the minimum repayment of a debt account. That way you’re paying off the interest and the balance of the debt account.
What should you do if you can’t afford your debt payments?
Seek professional help
If you can’t afford to pay your monthly credit card debt repayments, you may be in serious trouble. And the longer you wait to pay it off, the worse your financial situation will become.
The debt review process is ideal if you have an income but can’t afford all your monthly expenses.
The is a simple and effective process that has helped thousands of South Africans over the years.
Once you’re under debt review your debt will be consolidated. That means you’ll be paying lower monthly instalments where you will be able to free up some cash to cover other monthly expenses.
The benefits of debt review
- Get access to a personalized monthly budget
- Only make one single reduced monthly debt repayment
- Creditors won’t be harassing you anymore
- All your assets are legally protected from creditors
If you need more information about the debt review process contact us today. One of our friendly consultants will guide you through the process and help you with your financial situation.
Fill in your detail in the form below and we’ll get back to you as soon as possible.