Reality bites: Gloomy 2019 for over-indebted consumers struggling to make ends meet

Overspending over Black Friday, Cyber Monday and the Christmas holidays will have "severely negative consequences" for overly indebted consumers, a debt counselling expert has said.

Acknowledging the brief relief brought from the decrease in fuel prices in December and now January, CEO of Debt Rescue Neil Roets also pointed out that consumers are not yet out of the woods.

"The rest of the picture for 2019 looks gloomy, to say the least," he said.

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Roets says that the period between January and March will be the busiest for the debt counselling company.  

"There is a certain kind of madness that grips consumers over the holidays where spending becomes totally irrational and this is not helped by the massive advertising campaigns that retailers launch at this time of the year to encourage shopping.

"We in the debt counselling industry see the extremely negative results of binge shopping in the following year when we have to assist consumers to deal with the mountains of debt they had incurred," he explains.

"The one consistent comment we get is this sense of entitlement that because everybody else was shopping they felt entitled to join the shopping stampede."

• READ: Broke this holiday? Here's how to max out a no-spend 'staycation'

Roets says many consumers plunged themselves further into debt over the holiday season by borrowing money or using credit cards to pay for expensive holidays.

Experience over time has shown that January is the month of the "Great Reckoning" when the chickens come home to roost, he explains.

"We see more new clients seeking help with the repayment of their outstanding debt in January and February than during any other months of the year because of additional debts that had been stacked up during the holiday season.

"Parents suddenly realise that they have to pay school fees that had not been budgeted for and with credit cards maxed out on luxuries in November and December, many have no choice other than to seek relief by going under debt review to prevent debt collectors from seizing their property."

• READ: Why holiday spending makes it easier for fraudsters to scam you

Roets says it is important to have a budget, which accounts for expenditure such as school fees and payments on credit and store cards.

"Bear in mind that the interest rate on credit cards is substantial, so wherever possible, buy cash."

He also wars that for those who struggled to manage their finances in 2018, new year will likely be even tougher.