With over 8 million South Africans in arrears of 3 months or more, there was welcome relief by The Reserve Bank as interest rates were reduced by a further 0.5%. DebtBusters, a debt management company said this was excellent news and would be welcome relief for the struggling consumer, as well as for businesses and […]
30 January 2015
“With approximately 50% of South Africa’s credit active consumers in arrears on one or more of their credit agreements, consumers with debt or those on the verge of over-indebtedness received no relief with the repo rate staying still,” says DebtBusters marketing manager Kelli Knutsen
For many over-indebted consumers, as well as for business and commerce, this was the wrong decision.
‘We had hoped to see a rate cut by The Reserve Bank, but we are flabbergasted that it did not happen today. The consumer debt levels in South Africa are still incredibly high and we needed this interest rate cut, so that these debt levels can be reduced to more manageable amounts,’ says Knutsen.
The epidemic of debt is currently strangling many households and our economy. Debt problems are still not spoken about in household and we need to make more consumers aware that they have other options than just burying their head in the sand.
Knutsen goes on to say, “The average consumer before signing up with DebtBusters, spends more than 110 percent of their net income servicing debt, without taking into account their living expenses.”
“Consumers feeling the financial pinch are already struggling to meet their car finance payments, home loan repayments and numerous other financial commitments. We are hoping consumers use this time to try and eradicate as much of their debt as possible and avoid defaulting on debt repayments,” says Kelli Knutsen
Although consumers have not received any financial relief today, they can only hope that the cost savings on reduced fuel prices and lower inflation rates over the past two months, in addition to a steady repo rate, will contribute towards assisting them with sorting out their financial burdens.