Finance

How the fuel price hike will impact the 27 million credit active consumers

By Opinion Apr 7, 2021

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The newest fuel price hike comes into impact after the four-day lengthy Easter weekend, a time when consumers are inclined to spend extra money on issues like journey, entertaining and basic consumerism.

And whereas there was some expectation that consumers could be locked down till harsher restrictions throughout this era, the President took an sudden flip in the newest household meeting by asserting minor changes to the present Covid-19 restrictions.

“These increases, as well as the weakening rand are definitely no joke and those consumers who are already embattled with high costs of living will feel this in their pockets this month,” says Debt Rescue’s Neil Roets.

Roets says, “As with other popular holidays in South Africa, Easter weekend is definitely a money draining time of the year. Many people go on holiday, buy too much chocolate and have big lunches and dinners, leaving their wallets a lot lighter by the end of the weekend. This joie de vie will also be enhanced by our current circumstances as consumers will take any opportunity to have some fun, after a year of dealing with the pandemic and having been under lock and key.”

The results of over-spending and better residing prices will see an increase in credit use as consumers return from their holidays and are confronted with their day-to-day realities.

Latest analysis from the National Credit Regulator (NCR) factors out that cash-strapped consumers flip to credit to assist handle their monetary tasks, however the worrying development is that these whose accounts are in arrears is sort of 50% of the 27 million credit active consumers.

“This is a concern not least as those who are in arrears will also be charged a far higher interest rate when next they apply for credit, as they are found to pose a higher risk to the credit provider,” feedback Roets.

PERSONAL FINANCE



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