Use your common sense
BLACK FRIDAY: IMPULSE BUYING COULD GIVE YOU A BAD CREDIT RATING
Remember, credit needs to be paid back with interest, fees.
Of the 24.59 million credit active consumers, 38.9% or 9.6 million have impaired records. This is a record on which a consumer and/or any of [their] accounts are either classified as three or more payments or months in arrears, or has an adverse listing, judgment or administration order.
If you didn’t budget for “Black Friday” this year, don’t be tempted, because buying on impulse may cause you to have a bad credit record.
By preparing a budget, consumers can prevent buyers’ remorse. Credit needs to be paid back with interest and fees. It costs more to pay by credit than to pay cash.
The NCR advises consumers to use credit wisely and only when necessary.
Consumers should only take out credit that they can afford and pay [it back] accordingly, as per their credit agreements. Skipping payments will adversely affect consumers’ credit reports, which will limit their future chances of accessing further credit when they really need it. Debt should be used for asset building.
The festive season is around the corner and if they don’t spend wisely during Black Friday, this could set them back financially in the new year and it’ll be difficult to catch up.
Consumers should prioritise necessities like their bond/rent, transport, groceries, school fees, insurance etc. before splurging on Black Friday.
Here are tips to help avoid the urge to spend unnecessarily this Black Friday:
Set a realistic budget of what you can afford to spend and stick to it;
Don’t spend what you don’t have – i.e. don’t live beyond your means and don’t buy if you haven’t budgeted for it;
If an item is on sale and you buy it on credit, remember that interest and fees will push up the price. Cash is king;
Don’t be impulsive when you shop;
Have a shopping list to avoid buying unnecessary items – if you don’t need it now, chances are you may never need it.
Get a free copy of your credit report from registered credit bureaus on the NCR’s website: www. ncr.org.za.
Jimmy Golele is acting manager: education & communication at the NCR
Consumers should prioritise necessities like their bond/rent, transport, groceries, school fees, insurance etc. before splurging on Black Friday.
Jimmy Golele