A fourth consecutive repo rate hike since November would be of utmost concern to consumers in light of the burden of increasing food, electricity and fuel costs, DebtBusters warned on Wednesday.
28 November 2012
With the holiday season upon us, South Africa’s biggest debt counsellor DebtBusters has seen a decrease in the amount of applications for debt counselling, but an increase in the number of enquiries submitted to the company website.
This prompts the company’s MD, registered debt counsellor Luke Hirst, to come to one very telling conclusion:
‘The recent state of enquiries without formal applications means one thing – people are very concerned about their finances, but they refuse to forego their spending over the Christmas season – I have no doubt we will see a large portion of these people coming back to us in January in even more trouble.’
Hirst cautions that ‘this is no time to abandon your budget – thinking that one last spree for the year is ok is a huge mistake, and incurring debt to indulge in festivities and Christmas presents can only lead to getting onto an unfortunate debt spiral.’
The logical explanation is that consumers are spending beyond their means during this festive time but are reluctant to sign up for debt review until the New Year is upon them and they are faced with the truth of being over indebted.
Hirst goes on to say, ‘The more you borrow, the more interest and charges you will have to pay and the less disposable income you will have. If, after deducting living expenses from your net salary, your debt instalments are more than the money you have left over, then you should apply for debt counselling before it’s too late.’