With the ever-increasing cost of living many South Africans are swimming in a pool of debt with no life-boat in sight. According to the credit bureau statistics reported for the quarter ended June 2013, the number of consumers with impaired records increased by 189,000 to 9.53 million from 9.34 million in the previous quarter. If […]
10 April 2013
Read the following article on DebtBusters that featured on www.fin24.com.
Johannesburg – The average age of consumers falling into debt has fallen from 42 to 34 in the last five years, a debt management company said on Wednesday.
“This latest data is by far the most worrying, as it shows that it is the younger generations who are getting into trouble with debt, and getting into trouble quickly,” DebtBusters spokesperson Ian Wason said.
Nearly 50% of all credit active consumers were struggling with debt repayments.
“From a macro-economic point of view, the credit providers are effectively taking these crucially important consumers out of the economy.”
Wason said once a young person had too much unsecured debt, they were unlikely to ever be able to buy a house, start a business, or save for the future. In recent years, unsecured credit had been growing at rates of up to 40%.
“Unfortunately we can see very little evidence of this money being used for anything other than consumption.”
People were spending more than they earned, and this could only end in a debt spiral, with consumers taking out increasingly expensive loans to keep up with existing loan repayments.
“DebtBusters implore credit providers to perform more stringent checks on their clients before they lend, to implement some form of percentage cap on net income to debt repayments.”
This article originally featured on www.fin24.com