More SA consumers battling to pay their home loans and credit cards

South African consumers are battling to pay the instalments on their home loans and credit cards, according to a report, which again shows that high income consumers are finding it increasingly difficult to repay debt and continue to use their credit cards extensively.

This suggests that mid-to-high affluence consumers, who typically qualify for these high-end credit products, are struggling to afford their monthly payments, Jaco van Jaarsveldt, Experian’s Head of Commercial Strategy and Innovation, says. Inflation has remained within the target band of 3% to 6% of the South African Reserve Bank since June 2023 after 13 months of exceeding the target band. During this time, inflation reached a peak of 7.8% in July 2022. The December 2023 decrease in inflation coincided with a drop in food inflation, which was good news for the cash-strapped South African consumer base, Van Jaarsveldt says.

“The rapid rate at which interest rates increased and have now been sustained for the last 10 months, has put immense strain on credit-active consumers, particularly those exposed to secured credit, such as homes and vehicles. Younger consumers who are relatively new to the credit world also felt the pressure while they have to navigate new territory through times of sustained high interest rate.”

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