“Consumers still need to be highly responsible and conservative when borrowing money,” says Peter Setou of the National Credit Regulator (NCR). This admonition comes in the wake of declarations that the global recession has come to an end and that a turnaround has begun, much sooner than experts had anticipated.
Despite the global turnaround, the South African economy still boasts a steady flow of
debt review applicants. According to the NRC, which falls under the Department of Trade and Industry (DTI), roughly 9 000 indebted consumers are still applying to undergo the debt counselling process each month. This figure is on top of the more than 22 000 consumers who are currently undergoing the process.
To counter these statistics, Setou has urges consumers to be informed about their debt. To this end, consumers must ensure they are familiar with the various clauses of the agreement between themselves and the creditor. In particular, Setou warns consumers to be on the lookout for so-called “no-deposit required” clauses, which can prove more costly in the long run.
The NRC’s warning to borrow wisely is a sentiment that, no doubt, is being echoed by economies across the world. The “credit crunch” which buckled the world’s greatest economies has highlighted the pitfalls of borrowing and so the recent turnaround should be seen as an opportunity to become more informed about one’s debt. As the NRC states, “an informed consumer is an educated consumer.”