South Africans are experiencing a deepening cost-of-living crisis, driven by the highest interest rates in over a decade.
Concerns regarding Interest Rates
Neil Roets, the CEO of Debt Rescue, shared his concerns about the impact on everyday people. “The extended steep interest rate has decimated the lives of South Africans from all walks of life, and with borrowing costs at their highest level in more than a decade, households are feeling the pain of higher prices. Urgent action is needed to diffuse this ticking time bomb.”
Impact of Inflation on Basic Needs
Roets is very concerned about how inflation is affecting basic needs. “The most distressing consequence is that people are buying less food because their salaries already cannot keep up with high inflation and interest rates. They have been hanging on by a thin thread since the start of the interest rate hiking cycle, and many have reached the end of their rope,” he said.
Expensive Credit and Unsecured Loans
“Average interest rates for unsecured credit, of which credit card is a portion, are hovering around 25.7%. This is the highest we have seen since 2016. That is pretty expensive credit, especially if you are unsure as a consumer whether you will make the necessary payment by day 55,” Roets added.
Rising Demand for Debt Counselling
Roets also mentioned a sharp rise in debt counselling enquiries, showing how deeply the financial strain is being felt. “My advice to those who find themselves in a debt trap is to seek help through debt review, where a registered debt counsellor can assist you to manage your financial predicament. It is never too early to ask for help,” Roets urged.
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