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

3 June 2018

When consumers ask for our help, there seems to be one particular element in the process which make them hesitant to sign up for the debt counselling process: Not being able to get more credit during that time…

The thousands of client who have successfully completed the process will however all agree – they would not have been able to take back financial control otherwise.

Part of DebtBusters’ main priority is to create a platform where the consumer’s financial situation and their relationship with debt is discussed and a solution is offered.

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 over-indebted people in South Africa which need help.

These are all people who like the benefits that debt counselling offers them in the form of lowered monthly instalments, reduced interest rates and legal protection from creditors. They just struggle a bit to get past the idea of not being able to take out any further credit during the course of the debt counselling process.

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

The long and the short of it

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, take the kids to school, etc.

The problem arises when a consumer has taken out credit to the point that they cannot afford the monthly repayments and this results in 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 and will give you time to plan wise financial decision making for the future.

If you are already over indebted, taking out further credit can only make the situation worse and will make the debt hole deeper.

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 or lump sum of 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.

Take the first step to a financial healthier you today! Click here for a free, no-obligation consultation with one of our Debt Specialists.