The Reserve Bank’s September quarterly bulletin shows that the ratio of debt to disposable income has increased from 75.6% in March to 76.3% at the end of June.
Some people take cash advances on their credit cards to pay their other creditors on time. It is better to fall a little behind than to borrow your way deeper into debt.
Credit used wisely can be used to build wealth, for example, buying a home and paying it off will eventually give you an asset that will keep on growing in value.
The beginning of a new year offers the chance for a fresh start with your budget and financial strategy. For those in debt, it should mean the opportunity to commit yourself to saving money and reducing what you owe.
Santa brought lots of gifts this year. Unfortunately, he also brought lots of credit card debt. But you can still get out of debt and save money in 2012. Adv Randolph Samuel, CEO of the Credit Foundation of South Africa, offers these tips:
Start with revising your budget, cutting back on unnecessary spending, and looking for better deals on everything from your car insurance to your cellphone, is a good way to make sure that you are able to make a dent in your debt.
“Before consumers sign credit agreements, they need to understand the cost of credit and the terms and conditions of different credit agreements,” advises the NCR.
Consumers spend too much at Christmas and fall behind with their debt repayments in the new year. Consumers need to spend wisely in the festive season and start the new year debt-free.
The panel encouraged consumers to think of creative and cost-effective gifts for Christmas. They leaned toward a saving, rather than a spending theme, over the festive period.
Having the wrong balance of credit types can mean a significantly lower credit score, and that can lead to higher interest rates, lower credit limits, and in some cases, denied credit applications.