NATIONAL NEWS - With Black Friday inching closer, the National Credit Regulator (NCR) is urging consumers to put away their credit cards and shop sensibly.
"Rather don't use credit if you did not budget for 'Black Friday'. You will not be saving anything as credit costs more," said the regulator's acting Manager for Education and Communication advocate Kedilatile Legodi. Black Friday which originated in the United States is an informal name for the day following Thanksgiving Day, which has been regarded as the beginning of the Christmas shopping season. The concept has in recent years started gaining traction in South Africa.
When one buys on credit, said Legodi, consumers will be liable for related costs such as interest, monthly service fees, once-off initiation fees, credit life insurance and others.
The NCR cautioned against making reckless spending decisions: "Although Black Friday may indeed be providing consumers with an opportunity to buy goods on special and discounted prices, consumers still need to spend wisely," she said. "Should you be unable to repay the credit granted, credit providers will take legal action and this will negatively affect your credit record. Once you have a negative record, not only will accessing future credit be a struggle but it will also be expensive, because credit providers will charge you higher interest rates in comparison to those who have positive credit records. This can also affect people seeking employment in areas where the job requires you to deal with cash and/or finances."
Tips ahead of Black Friday
- Plan and draw up a list of what you need, not what you merely want;
- Set a realistic budget and stick to it;
- Check items and prices before Black Friday to ensure you are really getting a better deal;
- Should you decide to buy, stick to the list;
- If buying on credit, consider the related costs and your repayment ability;
- Remember, cash is king;
- Avoid buying food on credit.
A free copy of your credit report can be obtained on the NCR's website: www.ncr.org.za.
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