The African National Congress is starting its “dispute resolution process” in a bid to address the a.
The majority of South Africa's consumers are feeling the credit squeeze, according to Trans-Union Credit.
The organisation says interest rate hikes, petrol and food price increases were contributing factors to consumers being overexposed to debt, defaulting on repayments or shopping for new credit to pay off debt.
It says consumers' affordability of credit is likely to decline with possibilities of their debt-to-income ratio increasing.
This will leave more consumers with less spending money and too much debt.
As the economic climate takes its toll, consumers are likely to dig deeper into their pockets to repay debt.
They might also spend more on their credit accounts than on saving, says TransUnion Credit.
The country's biggest credit bureau advises the following:
l Budget. Don't buy on credit without knowing if you can afford the repayments.
lWhen shopping for credit, check what the monthly repayments would be, including interest, and make sure you can cope with that before signing the agreement.
l Manage your spending. Before spending, check your limit on your statement and work out what you would pay if you used up all your credit.
l Try to keep credit repayments to between 20percent- 30percent of your income. If you have R5000 income a month, keep all your credit repayments to between R1000 - R1500 per month.
l Pay your account as agreed with your credit provider. Always pay your accounts in full, on time, every month. Do not miss your monthly payments, as this will be reflected as negative information on your credit report.
l Be upfront with your credit provider and negotiate possibilities of restructuring your debt repayments.
l Allow room for interest hikes in your affordability calculation. When taking on new credit, make sure that you make an allocation just in case there is an interest rate hike or other inflationary increases. - Isaac Moledi