Having credit card debt seems the norm these days. In fact, having debt of any kind seems like a part of everyday life, even for those families that seemingly have large salaries and incomings each month.
The Money Charity looked into some interesting money stats that could shed some light on why this seems to be the case. Some possibilities include:
- The average cost of raising a child to the age of 21 is over £231,000 (R5118326.82)
- Energy prices increase year on year
- Property is becoming more expensive – (R1,566,017)
- South Africa has one of the highest levels of unemployment in the world
It seems that the cost of living is higher than ever before. The demand for materialistic items is also higher than we have seen in the past, and it doesn’t seem to be going down any time soon.
The ability to apply for a credit card or loan is also easier than it has been before. You can simply go online and fill in a quick survey without thinking much about what you are doing. This differs from the past when you might have to walk into a bank and talk to the Bank Manager, which could make you think twice about taking out the loan.
In fact, Wonga SA conducted a survey of 18000 respondents to look into how people apply for credit and they found that over 77% of people didn’t even look at interest rates when they applied for a credit card or loan! This is a very worrying figure, as Wonga suggests everyone should think carefully before applying for a loan, however much money they are applying for. You should ask yourself three questions; What is the money for? Do you need it? And how much will it cost you in the long run?
Being financially literate is all part of the solution to the debt problem. Borrowing money is not the problem – getting a loan from a reputable lender when you really need the money can be a great financial boost just when you need it. It is what you spend the money on, how you repay and how often you take out these loans that will dictate how financially savvy you can be.
If you are worried about debt, it is important to approach the topic head on and not hide it away. In fact, burying the problem can cause stress and anxiety that affects your everyday life. You can seek advice from a financial expert, or you can speak to family and friends. However you do it, don’t procrastinate any longer – ensure you are on top of your debt situation before it gets away with you.
Getting into debt seems easier to do than ever before. Why is this? And how do we get out of it?