National Credit Regulator
Pretorium Trust is a registered credit provider in terms of the National Credit Act (NCRCP228) and subscribes to the codes required by this Act.
The usage of credit facilities for consumer spending and the finance of motor vehicles and luxury goods are convenient and essential instruments for many consumers.
However, if credit facilities are not properly managed, a consumer may be caught in a debt trap with serious and adverse long term consequences.
A consumer who encounters financial difficulties to the extent that he can not service his debt, runs the risk of judgement been granted against him and also being blacklisted with a credit bureau. In terms of the National Credit Act we may, at additional cost, employ the service of a Debt Counselor to reschedule his debt.
The disadvantage to a consumer is that, until such time that his debt is settled, he will be denied access to any form of credit agreement.
The following are a few hints which could assist consumers who wish to apply for credit:
- Budget monthly to assess your income compared to expenses to ensure that the payments in respect of additional credit purchases are affordable.
- In most instances interest as well as other costs are payable on credit facilities. Such interest could be charged at a fixed or a fluctuating rate. Fluctuating interest rates have been a major cause of financial difficulties for many consumers in the event of extreme interest hikes. It is crucial that a consumer should budget for such unforeseen situations, especially regarding housing bonds and motor vehicle finance.
- Budget for unforeseen expenses such as medical accounts before applying for credit. A credit facility is a handy instrument but must unfortunately be paid strictly in accordance with the credit agreement.
- The consolidation of debt by acquiring additional expensive credit might worsen the situation as new debt must also be repaid. It would be advisable to rather, for the time being, avoid any unnecessary expenditure. Lowering one's standard of living is a hard thing to do but is surely the best option from a long term point of view.