According to Credit bureau data, the proportion of South Africans with impaired credit records is about 39.1%, though this does not include credit consumers who have taken out loans from informal providers like loan sharks.
One of the biggest manifestation of the debt problem in the formal credit system is long-overdue (120 days or more) credit and store cards which has been estimated to be an over R18 billion problem.
The poorly performing economy coupled with high unemployment and low wage growth are factors contributing to the vulnerability of consumers.
It becomes ever more important for consumers to exercise caution before making any credit agreements. Consumers should also make effort to pay up their debt early by channeling more of their incoming towards debt payments, changing their spending behavior and using their assets to offset credit balances, for example by moving funds from investment portfolios towards credit accounts.