When things are this bad, credit becomes very attractive as a means to make it through the month. However, according to the latest stats released by the National Credit Regulator (NCR), banks and financial organisations are taking a tough stand and being strict with lending.

“I applied for an overdraft recently and was declined,” says a DESTINY reader who wants to remain anonymous. “Thank goodness, because had I added something else, I would have been in serious trouble!”

Unsecured credit, like personal loans, credit cards and overdrafts, registered the biggest drop at 22.29% and fell by R6.48 billion.

According to Consumer Credit Market Report (CCMR) released by the NCR last week, total credit extended to consumers dropped by almost 15% in the first quarter of this year. The report is based on data submitted to it by registered credit providers and covers credit market information up to March 2013.

“Credit granted to consumers dropped 14.72% from R120 billion in the fourth quarter of 2012 to R102.29 billion in the quarter ending March 2013,” explained Nomsa Motshegare, CEO of the NCR.

Unsecured credit, like personal loans, credit cards and overdrafts, registered the biggest drop at 22.29% and fell by R6.48 billion.

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The drops are also attributed to the regulator’s strict credit programmes that require credit providers to make thorough assessments before granting credit privileges.

Indebted consumers borrowing less

The number of credit applications declined by 14.35% from almost 12 million in the last quarter of 2012 to just over 10 million in the first quarter of 2013. New mortgages, vehicle finance, credit card and store credit all dropped 12% on average.

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These figures show that consumers continue to be under financial strain with soaring prices and mass retrenchments.

Live by a budget, says Lebohang Selibi, spokesperson for the NCR. “If money available after payment of essential expenses is not enough to pay debt, you can downgrade and change your lifestyle. Downgrading does not mean that you will never rise again, use it as an economic strategy that will assist you get by until you’re back on your feet again.”

More tips to get out of debt

* Record your spending

* Categorise your spending into “must-have”, “should-have” and “like-to-have” and prioritise must haves.

* Make a budget based on spending

* When you have extra cash like a bonus, pay off any debt

Additional reporting by Zanele Sabela