Don’t fall into Black Friday debt trap

With just nine days remaining to Black Friday, the biggest one-day shopping event in the world, experts are warning consumers not to fall into the debt trap.

According to consumer finance firm RCS, consumer spending on Black Friday continues to increase with sales volumes going above R2.5bn in 2021.

“Despite 2022 being one of SA consumers’ toughest years yet, experts predict that South Africans will turn to credit to support increased spending over this period,” RCS deputy CFO Tonia Pavlou says.

“This increase in spending could be seen as a way to make up for what they haven’t been able to purchase during the year. But consumers need to think beyond Black Friday and manage their credit smartly to avoid falling into a debt trap ahead of the busy festive season.

“We urge South Africans to practise responsible purchasing and borrowing as a component of personal financial wellness. On the whole, South Africans need to become more aware of how the financial decisions they make today will impact them in the months and years to come.”

National Debt Advisors CEO Charnel Collins says Black Friday, which falls on November 25, is “not the biggest discount shopping day of the year, as so many believe”.

“There are far better discount opportunities throughout the year. Many retail outlets often inflate prices just before Black Friday to create the illusion that prices have decreased dramatically on the day,” Collins says.

Pavlou advises, “…Think of Black Friday as a chance to take stock and make a financial plan that will allow you to see the end of the year through without incurring unnecessary debt.”

Collins says many retailers resort to marketing tactics to encourage far more spending than saving.

“This involves lowering the prices of a select few items to attract buyers to the store, which often leads to shoppers losing these apparent savings by purchasing other, non-discounted items.

“The important thing is to shop wisely and not get duped into buying things you do not need. More importantly, consumers should avoid buying on credit all in the name of Black Friday,” she says.

Collins says consumers must not allow Black Friday or the festive season derail them from “practising healthy money management tactics”.

Collins and Pavlou advise you keep these tips in mind for Black Friday as well as the upcoming festive season:

Create a budget and stick to it: Make a list of all the items you want to buy and set a corresponding budget, making sure you do not deviate from this plan. Do your research by browsing different stores for the best deals on those particular items – and nothing else. Avoid the impulse buying of items that are not on your list.

Stay vigilant: With online shopping, be careful of chancers trying to take advantage of the frenzy and scam people into buying poor quality or dubious products. Apply the notion that “if it’s too good to be true, it probably is”.

Keep in mind that Black Friday is not only for luxury or non-essential items. Be on the lookout for essential items (like food and toiletries) that you can save money on, especially when buying in bulk. These can be added to your list and factored into your monthly essentials budget.

Avoid debt at all costs: If you cannot afford to buy an item with the funds you have available, don’t buy it. All too often, consumers turn to credit but this will only lead to you paying much more than the advertised price, thanks to interest and debt servicing costs. Collins advises that the best way to avoid debt is to keep track of your spending and buy only what you can afford.

Think about Jan-worry: “After a long year, most of us want to let our hair down and relax. This often sees us digging deep into our pockets to enjoy all the season has to offer. While there is nothing wrong with the occasional treat and enjoying yourself responsibly, there is nothing worse than waking up in January wondering how you will make it to the end of the month.”

Pavlou adds that consumers must not budge on budget, saying planning ahead can help you avoid falling prey to the frenzy.

Think outside the ‘Black Friday box’: When planning ahead, set your sights on your planned expenditure for the rest of the year. Consider things like whether you’ll need to change your tyres in the upcoming months, whether you need a windscreen repair or if you’re planning a home renovation.

If you know you’ll be footing the bill for these kinds of costs in the near future, have a look at whether you can take advantage of savings on those products or services on Black Friday, advises Pavlou.

mashabas@sowetan.co.za