Avoid debt traps
Not all debt is bad debt – but we have to keep a careful eye on how we manage our finances, so that we can avoid becoming over-indebted and dependent on debt.
Avoid unregistered micro-lenders / mashonisas
This is a debt-trap if ever there was one! Mashonisa’s are unregulated, unregistered lenders who charge huge interest rates (sometimes up to 100%) making it virtually impossible for you to get out the cycle of debt.
Don’t use your credit card to continuously cover everyday expenses
Credit cards generally have high interest rates. Try and pay what you bought on your credit card in full at the end of every month. If you can’t do that, then make sure that you at least pay more than the minimum payment due.
Having an overdraft facility on hand for emergencies is a good. Make sure that you pay off your overdraft diligently and as quickly as possible, to avoid high fees.
Try and give payday loans a miss
A huge part of society runs short of money before their monthly salary gets paid. In desperation, they turn to payday loans. These loans usually come with extremely high interest rates – and need to be paid (including interest) in one go from your next salary. Inevitably, this will see you run short of money the next month again. You will then simply be forced to get another loan – and soon you will be caught in a debt – trap.
Don’t buy unnecessary items on store cards
Good management of store card purchases can help you improve your credit score and credit rating, but it also serves as a huge temptation to buy and splurge on unnecessary items, especially in times of emotional distress. Many people turn to ‘retail therapy” to make themselves feel better on an bad day – but this can have disastrous effects on your overall financial situation and on your life.
Get a permanent solution to your debt
Instead of chasing your tail from month to month, taking from Peter to pay Paul and remain stuck in the vicious circle of debt, find a debt solution that will see you not only manage your debt, but get rid of it completely.
Debt counselling and debt review
Debt counsellors and debt review, were put in place through the National Credit Act (NCA), and along with the rest of the credit industry is regulated by the National Credit Regulator (NCR)
National Debt Advisors has been voted South Africa’s number one debt counselling company and we are perfectly equipped, and completely committed to helping you become debt –free.