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Have you been thinking of making any meaningful new year's resolutions? Then forget all about any other resolution - make 2009 the year to get out of debt.
Given the grim market conditions characterised by galloping inflation and steep interest rates, you would do better if you developed a plan that will gradually, but surely, get you out of debt.
Records of over-indebtedness levels in the country should also compel you to think twice before even applying for credit.
Often at this time consumers are desperate for financial assistance and might take out loans recklessly.
But Peter Setou, senior manager of education and strategy at the National Credit Regulator (NCR), advises that if you have to borrow money, then do it responsibly and wisely.
Specialist online financial adviser Justmoney.co.za says you should make tackling credit card, personal loan and store card debts your number one priority this year.
These are the debts that are most likely to cost you the highest interest. Following these tips could see you well on your way to living a debt-free life sooner rather than later.
l Write up a budget. This might sound like a cliche, but you'll need to do the basics first to give yourself the best chance of reaching your goal of becoming debt free.
Financial adviser Billy Nield advocates drawing up a spending plan rather than a budget, because the important thing is to control your spending on a day-to-day basis.
l Clear up your credit cards. One easy way to radically reduce the interest you pay on your debts - and therefore pay them off more quickly - is to move all your credit cards onto a balance-transfer deal with another credit card provider.
You will pay a far smaller interest rate on certain balance transfer deals, which will give you plenty of time to attack your balance.
Justmoney recommends the current American Express Balance Transfer Card that offers 9,9 percent interest for the first six months and thereafter the regular 23,9 percent.
Remember that the lower interest rate will only apply to the debt you transfer, so any new spending will be charged at the regular 23,9 percent.
l Overpay on your personal loans. If you have a flexible loan, your lender should allow you to make over payments, which will reduce the term and interest. Some loans can be fully repaid early without incurring any nasty early cancellation fees.
l Consolidate expensive short-term debt into your home loan. It is only possible to consolidate your debt if you have a home loan with "equity" in it (the difference between your property value and mortgage).
Debt consolidation can save you a huge amount in interest repayments as your home loan will be your cheapest form of debt. But make sure you overpay into your home loan every month to avoid paying more interest in the long term.
l Snowballing effect. If you can't get all your debts onto low interest deals, Justmoney advises:
l Tackle what you owe more effectively by clearing your most expensive debts first, while making sure you keep paying the minimum repayments on your other debt.
For instance, if you have a personal loan that charges more than 30 percent and a credit card that only charges 23 percent, pay off your personal loan, and only the minimum amount required on the credit card.
Once the loan has been cleared, use all the freed-up cash to tackle the credit card.
Any interest-free debts can be repaid last. This is known as snowballing as your repayments can be rolled up onto the next debt as each one is paid off.