As the country struggles to keep head above water amidst the ongoing COVID-19 pandemic, millions of South Africans are battling to cope financially. Many have either lost their jobs, experienced a cut in their overall income or found themselves having to close their businesses in recent months, and the economic fallout for individuals and families are devastating. Now, more than ever, it’s vital to take firm control of your finances.
CREATE A BUDGET
Write down your expenses and income to get a better idea of how much you actually spend each month.
Divide your expenses into “wants” and “needs” so that you can prioritise and spend less money on the “wants”.
Make sure your expenses do not exceed your income. Ideally you should not spend more than what you have.
SAVING IS IMPORTANT
Saving every month is very important, even if it is just a small amount, in order to build up an emergency fund and/or savings account. The ideal is to save at least 10 percent of your monthly income every month.
Rather save and purchase your desired product in cash than incurring a loan. Remember, loans’ interest rates are high and monthly instalments can increase during the loan period.
LOANS AND CREDIT
Avoid purchasing on credit. It is cheaper to buy products and services in cash than on credit or an account since there are usually no additional fees on cash purchases.
Think carefully about the implications before you incur debt. For example, unnecessarily purchasing clothing on credit is unlikely to assist in improving your financial position over the short or long term. Only incur debt for the things you cannot go without.
STORE ACCOUNTS, CREDIT CARDS AND BANKS
Do your homework and compare banks’ and stores’ terms and conditions so that you know exactly what you are signing up for. If you are unsure about anything, don’t be afraid to ask!
KNOW YOUR RIGHTS
The National Credit Act was established to protect consumers from greedy and unethical practices. Knowing your rights when it comes to obtaining a loan or buying on credit could help you avoid a few nasty pitfalls.
You have a right to:
- be informed of all terms and conditions before you sign any credit agreement so that you make informed decisions.
- accurate and up-to-date information.
- know and understand exactly what a marketing communation means. If you don’t, don’t be afraid to ask.
- restrict credit providers’ access to your home and workplace.
- a credit report and all information provided to any third parties.
- a credit assessment by the creditor to ensure that you can afford the credit, so it is not extended recklessly.
The Consumer Protection Act also ensures your rights to privacy and equality are protected.
- A consumer may not be discriminated against when applying for credit.
- You have the right to privacy which includes the right to refuse direct marketing via SMSes, emails or phone calls.
- suppliers cannot sell products and services with other financial conditions attached.
- all information about the product/service as well as understandable and clear marketing information.
- credit providers may not provide misleading or false information regarding goods or services, and may not use exaggeration or ambiguity in terms of goods and services.
Protect your ID number and bank account information. Your information can be used to open accounts and take out loans in your name. If this happens, you need to contact the relevant creditor immediately to explain the situation.
WHERE TO COMPLAIN
If you believe a credit provider or supplier has contravened either the Consumer Protection Act or the National Credit Act, you can report the organisation to the following bodies:
- Customer Contact Centre: 0861 843 384
- Office of Consumer Protection (OCP): (012) 394 1436 / 1558 /1076
- Email: [email protected]
- Online Complaint Form: http://www.thencc.gov.za/sites/default/files/u2/Complaint%20Form%20%202018.docx
- Call Centre: 012 742 9900
- Email: [email protected]
Written by: Stephan van der Merwe; Senior Attorney, Notary Public and Lecturer at the Stellenbosch Law Clinic