By Everson Luhanga
- Debt counsellors report a sharp increase in people asking for help this April compared to the same time last year.
- The National Debt Counselling Association says people who are struggling must ask for help before they lose things they own.
Families across South Africa are struggling to survive. Many are cutting back on what they spend, but they are still running out of money.
People are now taking out loans just to pay for everyday needs like food, transport and electricity.
High fuel prices are making it very expensive to travel. On top of that, electricity and municipal costs are taking up a large part of the money families bring home.
Debt counsellors are seeing the results of this pressure. They say many more people have asked for help this April compared to last year.
National Debt Counselling Association chairperson René Moonsamy said people have run out of choices. She said many are using their retirement savings or borrowing more money to get by.
Moonsamy expects borrowing to grow as life gets harder. She said people need to understand how debt works so they do not ruin their future.
“Credit itself is not the problem. It depends on what it is used for, how much it costs and whether the consumer can afford it,” Moonsamy said.
She said borrowing money to pay for studies, fix a home, or buy a car for work is good credit. This helps people earn more in the long run.
But she warned that using loans to buy groceries or pay regular accounts is bad credit. This does not help build a safe financial future.
Moonsamy said some people say they spend less money than they do when they ask for loans. This traps them in debt they cannot pay.
She said people who are struggling with debt must get help as soon as possible. Waiting too long means they will have fewer choices and could lose the things they own.
Pictured above: A wallet.
Image source: File
