The survey, conducted among 5 000 respondents, found that 52% of men questioned signed up to undergo debt review in the second quarter of the year, compared to 48% of women.
Most alarming and highlighting the dire financial distress that South African consumers are currently facing is the fact that there’s been a near-25% increase in the number of people who are seeking debt review because they aren’t able to keep up with their monthly debt repayments.
The latest National Credit Bureau Monitor stats reveal that 9,69 million of the 24,68 million credit active consumers have impaired credit records, meaning that their debt repayments are not up to date.
Debt Rescue CEO Neil Roets says that more consumers, particularly men aged 31-45, are opting for debt review because it enables heavily indebted consumers to gain breathing space, allowing “them to repay their loans in smaller instalments over a longer period”.
READ MORE: Seven habits of highly indebted people
The debt most survey respondents are grappling with are personal loans, followed closely by credit card debt.
“The best advice I can give to my fellow South Africans is to try and live within their means. Avoid store cards and cards wherever possible,” Roets advises in an interview with IOL.
“You’ve got to ask yourself the question: ‘If I don’t have the money today, where is it going to come from in a few months time?'”
He warns against the destructive habit of “keeping up with the Joneses” that has plunged millions of South Africans into serious debt.
“Keeping up with the Joneses is always a bad idea and a good secondhand car is always a better idea than a brand-new one.”
This sentiment has been echoed in research conducted by the University of Cape Town’s Unilever Institute into the country’s emerging black middle class.
“The black middle class is faced with more challenges of having to buy things when they move out of home, compared to other races. We call it ‘asset catch-up’. They have to buy cars, they rent in urban areas and on top of that, they have to send money home to improve the lives of their loved ones,” Unilever Institute Managing Consultant Paul Egen said in a previous interview.
READ MORE: Getting out of the debt trap
To compensate for all of this, more and more black South Africans take on more debt to service existing debt and the vicious cycle gets perpetuated.
Tips for managing your debt:
- Pack a lunchbox for work and cut down on the number of times you eat out at restaurants or buy takeaways.
- Consolidate your debt by paying off your most expensive debt such as your credit cards or loans with extremely high interest rates.
- Never use one credit card to pay for another one, or take out a loan to cover another debt – this will only further enslave you to your debt.
- Don’t let your debt exceed 35% of your net income.
- If you’re struggling to meet your monthly repayments, speak up and make adjusted repayment arrangements as soon as possible.
- Pay off all outstanding amounts on clothing store cards and close your accounts the minute you have finished paying off what you owe.
- Shop around different stores and compare prices before you make purchases.
- Pull the plug on any wasteful expenditure, including things like daily newspapers – these days you can get free access to the news online.