As South Africans celebrate the festive season, the Credit Association of South Africa (CASA) is encouraging consumers to make careful, responsible credit decisions. It encourages South Africans to borrow only from credit providers that are legally registered with the National Credit Regulator (NCR).
“This time of year typically places additional strain on household budgets,” warns CASA’s CEO, Leonie van Pletzen. “Factors such as gifting, travel, social events, January back-to-school costs, and family commitments can tempt consumers to take on debt they cannot afford.”
Van Pletzen advises that poor decisions made over this period can often lead to severe financial pressure early in the new year: “Credit can be a helpful tool, but only if used responsibly through registered providers who comply with the law and prioritise the protection of consumers.”
“Informal or illegal lending continues to target vulnerable households over this period,” she says. “This makes awareness and accountable decision-making more important than ever.”
Van Pletzen provides seven helpful tips that help consumers protect their financial wellbeing:
- Set a realistic budget: Plan for all expected expenses: gifts, food, travel, entertainment, fuel, school fees, and January essentials. Only spend what you can genuinely afford, and not what you hope you will have.
- Only borrow if you can afford to repay it: Before taking credit, calculate your monthly repayment and check whether it fits comfortably into your budget after covering your essential living costs. If it will cause stress or force you to skip other payments, rather avoid the loan.
- Borrow only from NCR-registered credit providers: Your safety matters. An NCR-registered provider must follow the law, explain all costs, and treat you fairly. Always ask for the provider’s NCRCP number and verify it with the NCR.
- Use your bonus or 13th cheque smartly: This reduces the need to borrow later. Instead of spending it all immediately, consider:
- Paying off existing debt
- Boosting your savings, or
- Preparing for January expenses.
- Prioritise essential expenses first: Your household bills, school fees, transport, and food budget must come before festive spending. A strong focus on essentials now prevents financial pressure in the new year.
- Read and understand your credit agreement: If something is unclear, ask questions until you are confident. Never sign a contract you do not fully understand. Before signing anything, make sure you clearly understand:
- The full interest rate
- All fees and charges
- Repayment dates and instalment amounts
- Penalties for late or missed payments
- Protect your personal documents and banking information: A legal credit provider will never ask to keep or withhold your ID, bank card, PIN, or SASSA card. If this is requested, walk away immediately. It is illegal.
“During the festive season, we encourage all South Africans to stay alert, protect themselves, and avoid the traps of illegal and informal lending,” urges van Pletzen. “Borrow only when necessary, only what you can afford, and only from providers who operate within the legal frame work.”
“Your financial wellbeing in January and beyond is dependent on the decisions you make now,” she concludes.