Written by: Casper le Grange
Article source: JOY! Magazine
The average credit card limit in South Africa is around R35 000, and the average outstanding balance on the seven million credit cards that are held by South Africans increased by 1% over 2020, to almost R18 800. Credit card debt can seem like a massive obstacle to overcome, especially in this tough financial time. “Facts do not cease to exist because they are ignored.” – Aldous Huxley.
Don’t make excuses for yourself
Acknowledge your situation so you can rectify it before it is too late. The most obvious step of drawing at least 3 months’ credit card statements and going through them should be step one. Look at your spend. What is wasteful? What is necessary, but could perhaps be purchased with cash? What was your credit card used for that was absolutely necessary? It is important not to make excuses for yourself.
Credit card debt can seem like a massive obstacle to overcome.
Tips to help:
Now that you know what your credit card balances are and where you went wrong, it is time to fix it. A few tips and tricks that can help:
- Giving yourself a list of things you “allow” yourself to buy on your credit card will help. Take a small piece of paper and write down the balance you owe on your credit card along with the list of things you will allow yourself to use the credit card for. Now wrap it around your credit card and put your wrapped card back into your wallet. Every time you want to use it your note should deter you from wasteful spending.
- You can also write down your triggers, like specific stores, or maybe you spend more around certain friends or family members. Writing a list of triggers will help you be more thoughtful in the moment of the offending trigger.
- If you are always online shopping for unnecessary items, delete the app! Perhaps promotions are your trigger. For example, perfumes. Gather all your perfumes and put them in one place, look at them and tell yourself, “I have enough for now. It’s not a necessity and I will not buy more. Do I want another perfume, or do I want to get rid of my credit card debt?” You can also research other ideas.
- Next, I suggest paying more than the minimum required monthly instalment. This will help decrease the amount of interest you will pay back. You should also check with your bank if there are any better deals you can get such as a 60 day interest free credit card facility or a reduced interest rate. We often just accept what is given to us and do not ask for better deals. TransUnion, in their Q3 Report of 2020, stated that consumers have preferably not missed payments on their credit cards. “It is possible consumers are prioritising credit card payments to preserve both the utility and liquidity they provide in COVID-19 times”.
Reach out for help!
If you find that you are not managing to sort your debt out on your own, it may be time to get professional help. You are welcome to give our office a call on 086 100 1047 or send an email to firstname.lastname@example.org. Our assessments are obligation-free and 100% confidential.
Casper Le Grange is a registered debt counselor with the National Credit Regulator, NCRDC1560.
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