theDCI warn not to overspend as year reaches it’s end
theDCI have issued a warning to shoppers this December:
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DCI warns on the ‘like it, charge it and regret it’ trap
As the annual Christmas shopping splurge gets under way, theDCI has sent out a seasonal alert to indebted consumers to avoid the ‘see it, like it, charge it’ frenzy.
‘Regret it’ is the next step in the spending spree progression, warns Deborah Solomon, founder of theDCI. “Credit retailers – the stores that encourage you to open accounts – are gearing up for the annual shopping binge,” she notes.
“These stores stress quick, easy convenience and those opening new accounts might be surprised at how easy it is. Many staff members don’t even check whether the consumer has listed credible household budget allocations.
“Easy credit becomes addictive. It is so easy to keep taking your credit ‘fix’ and incredibly difficult to kick the habit. Consequences can be catastrophic as millions of consumers have discovered.”
Keeping up with ‘easy monthly payments’ has already proved impossible for approximately 9 200 000 credit-users. Figures from the National Credit Regulator (NCR) show that South Africa has a ‘credit active’ population of 19.6 million. But only 53% are in good standing.
The other 47% have ‘impaired’ records. They are in arrears by three months or more on their consumer accounts and have an adverse credit listing or have had a judgment or administration order taken out against them.
The total outstanding amount owed by consumers stands at R1.36 trillion if store card debt is added to other forms of debt like personal loans, payday loans, credit card obligations, mortgages and vehicle financing.
Credit overload has created a flood of applicants for debt review. About 6400 consumers a month seek debt counselling, the service enshrined in the National Credit Act that is provided by registered debt counsellors aligned with theDCI.
Deborah Solomon fears debt review numbers could soon rise as post-spree consumers realise that accumulated credit charges don’t leave them enough money to live. She warns: “The over-indebted consumer starts by skipping payments. The ability to miss early payments may even be built into the deal as this enables interest costs to mount up. “After skipping a few months and paying some accounts but not others, consumers realise they are hopelessly over-committed.”
She advises consumers to give themselves a pre-Christmas present – a properly drawn up household budget listing all living expenses. They can they assess what they can afford to spend on gifts and holiday extras.
“Double trouble threatens those who don’t budget properly,” she says. “First they hit trouble with their store accounts then desperately take out personal loans, using more credit to pay down credit.
“To avoid this craziness, ensure you know your monthly cash position. Then ignore the urge to splurge. Your holidays will be happier for it.”
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To find out more about theDCI head over to: www.thedci.co.za