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A Fin24 user who regarded herself as educated on debt issues says sometimes the only way to learn is to experience the debt trap and the discomfort that goes with it. She writes:
As a new graduate I was fortunate to be employed by one of the largest bureaus in the country. My role was to receive calls from consumers who wanted to know about their credit standing and how they could rehabilitate themselves.
At times, the person on the other end would be crying because their whole salary would go towards servicing debt, leaving no money to live from for the rest of the month.
At other times, the situation would be so dire, the person would be suffering from depression because of the mountain of debt.
Having gone through this, I realised that debt requires a disciplined approach.
It is imperative to have an intra-personal conversation before applying for credit. Ask yourself: do I need this? Why do I need it? And most importantly... can I afford it?
The South African schooling system does not adequately teach the youth about compound interest. A lot of times we are duped into thinking that when we take out credit, we are liable for the purchase price, but many other charges make that debt skyrocket without you realising it.
With all my knowledge and experience, I too fell into a debt trap. I got a credit card and used it to the max, so that paying it became a struggle to pay it off.
Credit card: Friend or foe?
My circumstances had also changed: I was married, my husband had lost his job during the recession and life was generally tough. Not long after that, his car was repossessed.
I did all I could to hold onto my house. In fact, pressure is good, it teaches you to be industrious: I started selling chicken Cornish to supplement my income.
My personal lessons
1. No store cards;
2. Only one credit card and only for emergencies is enough;
3. Monthly savings are a must. This needs to be an automatic debit from my account - this way I do not skip;
4. I do not have to buy a new car at an instalment - I have saved money and purchased a 'good condition' BMW cash.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
As a new graduate I was fortunate to be employed by one of the largest bureaus in the country. My role was to receive calls from consumers who wanted to know about their credit standing and how they could rehabilitate themselves.
At times, the person on the other end would be crying because their whole salary would go towards servicing debt, leaving no money to live from for the rest of the month.
At other times, the situation would be so dire, the person would be suffering from depression because of the mountain of debt.
Having gone through this, I realised that debt requires a disciplined approach.
It is imperative to have an intra-personal conversation before applying for credit. Ask yourself: do I need this? Why do I need it? And most importantly... can I afford it?
The South African schooling system does not adequately teach the youth about compound interest. A lot of times we are duped into thinking that when we take out credit, we are liable for the purchase price, but many other charges make that debt skyrocket without you realising it.
With all my knowledge and experience, I too fell into a debt trap. I got a credit card and used it to the max, so that paying it became a struggle to pay it off.
Credit card: Friend or foe?
My circumstances had also changed: I was married, my husband had lost his job during the recession and life was generally tough. Not long after that, his car was repossessed.
I did all I could to hold onto my house. In fact, pressure is good, it teaches you to be industrious: I started selling chicken Cornish to supplement my income.
My personal lessons
1. No store cards;
2. Only one credit card and only for emergencies is enough;
3. Monthly savings are a must. This needs to be an automatic debit from my account - this way I do not skip;
4. I do not have to buy a new car at an instalment - I have saved money and purchased a 'good condition' BMW cash.
- Fin24
Help us help you by taking our second annual Debt survey and you could win R3 000, or add your voice by sharing your debt experiences, debt-busting tips and insights. Have a question? Ask our experts.
