BLACK FRIDAY WARNING
CONSUMERS, already buckling under R51 billion of debt, have been warned not to be tempted into further debt because of Black Friday specials.
The Banking Association of SA said this figure was the monetary value of people under debt review, which was up from the previous year.
Association chairperson Cas Coovadia said that in December 2016, the total debt review portfolio across the major retail banks stood at R47.3bn. In December last year that figure rose to R51.5bn, Coovadia said.
“From these statistics, it is also evident that banks continue to assist consumers that find themselves in financial difficulty, with R3.4bn (in 2016) and R4bn in 2017 that banks had forgone in interest and fees,” Coovadia said.
Capitec Bank marketing executive Francois Viviers warned that Black Friday should not lead to spending money you don’t have.
“Think it through and be smart. Electronics, clothing and flashy accessories quickly become old, but a new computer for your business or a vehicle to transport your kids to school stands the test of time.
“It’s all about long-term utility over short-term happiness,” he said.
Consumers still paying off loans and debt on credit cards should be wary.
“If you think Black Friday was planned for your benefit, think again. It is intended to get you to spend more of your money.
“Retailers have not reduced prices to be kind to you; rather it’s a chance to drive sales and increase profit before year-end.
“They want to sell their goods, and it won’t be at a loss,” Viviers advised consumers.
Added to the growing financial concerns is a possible interest rate hike this week of 25 basis points, which would increase vehicle and bond repayments, among other things.
The monetary policy committee cut interest rates in March, but at its next meeting this week, financial experts predict a 25-basis-point increase.
Adrian Goslett, regional director and chief executive of property giant Remax, said: “Every economy goes through cycles, and ours has currently taken a turn for the worse.
“I would advise buyers to shop around to make sure they get the best possible deal on their home loan, as well as to allow room in their budget for higher bond instalments in the months to come,” he said.