5 Common Debt Traps And How To Avoid Them

Saturday, August 18th, 2018

The Vat increase, petrol price hike and escalation in luxury goods excise duty makes repaying debts all the more difficult.

South African consumer debt has reached more than R1.71 trillion, according to the Reserve Bank. In addition, a report by the World Bank has revealed that 25 million South African adults, out of 37 million, owe money to financial institutions or other corporate lenders such as shops that allow them to buy now and pay later. The combination of the recent Vat increase, the largest petrol price hike ever in South Africa and the escalation in luxury goods excise duty will make repaying debts all the more difficult.

Landmark Court Case Seeks To Stop Over-Charging By Creditors

Saturday, August 18th, 2018

Court papers filed in the Western Cape High Court last week by University of Stellenbosch’s Law Clinic and Summit Financial Partners make for disturbing reading. They are asking the court to stop creditors from loading unlawful costs onto the accounts of distressed debtors, which they reckon has cost debtors R1 billion in unlawful fees.

The so-called in duplum (‘double’) rule was written into the National Credit Act (NCA) in 2007, and means that once a borrower is in default, the outstanding amount payable can never be more than double the outstanding debt at the time of default. If you borrow R1 000, repay R400 of this and then default, the outstanding amount is R600. Under law, you are not obliged to pay more than double this amount (ie. R1 200) no matter how much interest supposedly accumulates, as long as you remain in default.

SA’s Household Savings Crisis

Saturday, August 18th, 2018

According to analysis done by savings fintech start-up MyTreasury.co.za, South African’s household savings rate comes last when ranked against the G20 countries. This is distressing news during savings month as it means that too many South Africans are living in debt or eating into their capital.

Source: MyTreasury

These finding are consistent with the worrying picture painted by Old Mutual Savings Monitor: among urban working households, an alarming 40% of respondents said they have no form of formal retirement savings at all. Thirty-two percent of respondents said they would rely on government and 38% their children to support them in retirement. The situation is likely much worse among the unemployed population.

Take Control of Your Financial Destiny

Saturday, August 18th, 2018

Financial vulnerability is one of the greatest challenges women face today. Women experience various types of gender bias throughout their working life that result in them saving less for retirement than their male counterparts. And not only are women saving less – if they outlive their spouse or get divorced, they could face being left destitute in retirement and becoming a financial burden on their families or the state.

For those who do divorce or outlive their husbands without sufficient retirement savings to see them through life, gender bias continues into retirement. It is therefore crucial that we as women empower ourselves and not plead ignorance.

        

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