Debt Rescue CEO Neil Roets warned that many households are entering the most financially demanding period of the year with “almost no buffer at all.”
“The interest rate cuts have helped at the margins, but not nearly enough to turn the tide for households whose incomes have been swallowed by years of rising living costs and shrinking purchasing power,” he said.
Roets added that the reality they are seeing daily is that consumers are entering the festive period with almost no financial buffer. “Many are already using unsecured credit, such as personal loans, payday loans, store accounts and overdrafts, simply to cover basic expenses. This is extremely worrying because when households rely on high-interest short-term credit to survive during a normal month, December spending patterns can push them into a full-blown crisis.”
Roets said that the festive season is the most financially vulnerable period of the year. “There is enormous social pressure to spend: gifts, food for family gatherings, travel costs, school uniforms and stationery for January, and endless retail promotions urging consumers to “buy now.” For someone already under strain, these pressures can easily lead to taking on even more unsecured debt.”