BUSINESS NEWS - With the cost of living rising, South Africans are set to face a double financial hit - a planned VAT increase and the effects of bracket creep where salaries rise, but tax brackets remain unchanged leaving workers with less take-home pay.
The result will be households having less money to cover expenses and debt repayments.
As financial pressure mounts, consumers are increasingly turning to alternative payment options like credit and pay-later providers to manage their spending.
Understanding how to use these tools responsibly is crucial to avoiding debt traps and ensuring financial stability.
1. Credit cards: Quick and flexible, but watch the interest
Credit cards are often used for both big-ticket items and daily purchases. While they offer convenience, the high interest rates (up to 22.25%) on outstanding balances can quickly make them an expensive option if payments aren’t managed correctly or paid off in a reasonable timeframe.
- Best for: Short-term spending that can be paid off quickly.
- Tip: Avoid using a credit card if you can’t settle the balance within the interest-free period.
2. BNPL: A flexible alternative to credit cards
Buy Now, Pay Later (BNPL) solutions like PayJustNow offer a zero-interest way to split payments over time, making purchases more manageable.
- Best for: Purchases that fall just outside your monthly budget and bigger purchase like home improvements and decor, tyres, and beauty and fashion. These can be paid off in smaller, interest-free instalments. BNPL is an alternative to credit, and still allows you to build your credit profile safely.
- Tip: Choose an appropriate BNPL provider that , that aligns with your salary cycle.
3. Revolving credit: Reserved for essential purchases
Revolving credit allows access to funds repeatedly, but variable interest rates mean costs can add up if balances are not cleared quickly.
- Best for: Emergency expenses or essential big-ticket purchases.
- Tip: Always monitor interest rates and repayment terms carefully.
4. Personal loans: Best for planned, large purchases
Personal loans offer fixed repayment terms and may have lower interest rates than credit cards. However, they should be reserved for well-thought-out expenses, such as large-scale home improvements or education.
- Best for: Large purchases requiring structured, long-term repayment.
- Tip: Don’t take a personal loan for impulse spending—stick to planned, necessary expenses.
5. Smart budgeting with deals
One of the best ways to manage rising costs is to plan purchases strategically, utilising deals and promotions where possible. For example, PayJustNow’s Deals Platform showcases discounted offers from trusted retailers, helping shoppers make budget-friendly choices.
- Best for: Finding deals that align with your budget.
- Tip: Try to take advantage of discounts on essential purchases where possible, while ensuring affordability within your monthly budget for discretionary purchases.
Planning ahead is key
Smart financial planning is more important than ever.
By choosing the right budgeting tools and using them responsibly, you can maintain financial stability and a good credit score while keeping up the lifestyle you want.
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