"Some borrowers like to think that credit is patient. This, together with forgetfulness about number of loans, is the main reason why many borrowers fall in to a debt trap," says Johan Maree, CEO of FNB Credit Card. "Consumer spending is bound to increase with the festive and holiday season approaching and it is crucial that consumers monitor their credit expenditure and realistically assess what they can afford to spend after adding their existing loan payments," adds Maree.
Retail accounts and credit cards are effective transactional tools if used within boundaries however when used to fund a lifestyle that is not realistically within your means of living, the risk of being caught up in a debt spiral increases significantly. FNB has noticed that accounts tend to go into arrears during the month of January resulting in customers starting the New Year off with bad credit ratings and a growing inability to make minimum payments.
Maree advises that debt consolidation is a good option to consider when making monthly minimum repayments become difficult.
Debt consolidation allows you to merge retails store debt, short term loans, personal loans and other credit card debt into an account, making the administration thereof manageable. This FNB Credit Card Balance Transfer, which is similar to debt consolidation, will allow customers to continue to make purchases whilst paying off your debt at a competitive interest rate over a longer period of time.
"Although it provides relief by lowering monthly payments, debt consolidation is not the answer for consumers spending above their means. In order to spend more responsibly, customers need to make a deliberate effort to foster better spending habits through tools such as budget applications or online calculators. Consult your bank for debt relief solutions so that you take control of your finances," concludes Maree.
