Why going on a credit diet could be the best thing for you

When consumers ask for our help, there seems to be one particular element in the process which makes them hesitant to sign up for the debt counselling process. This is the fact that they will not be able to get more credit during the process.

However, if you ask the thousands of clients who have successfully completed the process — they would tell you that they'd not have been able to take back financial control otherwise.

Debt counselling and credit

Part of DebtBusters' goal is to assist customers to better their relationship with debt through expert solutions.

While many embrace the opportunity to start a process where they can take back financial control, we also know there are still over 10 million overly-indebted people in South Africa.

People are usually keen on the benefits of debt counselling - such as lowered monthly installments, reduced interest rates, and legal protection. As we mentioned though, where they get stuck is the idea of not being able to take out additional credit during the debt counselling process.

A credit diet

We would like to ease the minds of consumers with these concerns about credit by highlighting why going on a credit diet may be the best thing for you in the long run.

As the old adage goes “too much of anything is a bad thing”, and we understand how some types of credit can work for you. There is nothing wrong with wanting a home loan to purchase property as an investment and applying for vehicle finance so that you have means to get to work and back.

The problem arises when a consumer has taken out credit to the point that they cannot afford the monthly repayments. This leads to an unstable financial situation.

Balance is key, and by cutting out credit for a set duration of time you will be able to focus on paying off your existing debt and achieving a healthy financial balance in your life.

This can be a great learning curve. It will give you time to plan wisely for you future finances.

If you are already over indebted, taking out further credit can only make the situation worse. Going on a credit diet will allow you to focus on your current debt obligations and you will complete the process faster this way.

Any additional money that you come into during the process can be put towards settling your debt and this will accelerate the process even more.

Remember, with a lowered monthly debt instalment and reduced interest rates you will be able to live comfortably without the need to take out any further credit.

A credit diet is not a life sentence, it is a temporary restriction to help you regain financial health and achieve financial stability so that you can move forward with your financial journey to grow and build wealth.