As we dive into the festive season, many worker bees are looking forward to spending well-earned bonuses, forgetting that January is lurking in the shadows. The National Credit Regulator’s (NCR) Specialist Rishana Singh urges consumers that while the extra money in their pockets seems like the perfect opportunity to spoil themselves and their loved ones, they must do so responsibly to avoid financial strain in January.

“I believe poor planning causes great stress so please plan for the festive season dubbed the “silly season”. It sounds boring hearing that you have to draw up a budget and plan during the season because we all just want to unwind and be with family and friends without any stress, but it is so important to plan according,” she said.

She said many consumers complain that January is a long month, but like many other months, January also has 31 days.

“What makes it longer though, is how you spend your money during the festive season. Make sure you have a plan, know what your expenses are for December and use the extra money you have to cover extra debt, January comes very quickly and with it comes the stress of school fees, petrol for work, food, rent and the general costs of living so try to ease yourself in January by covering some debt beforehand,” she added.
Singh advised that reckless spending over the holiday period without considering the January expenses, may lead some consumers directly into the trap of going to unregistered credit providers.

“As the NCR, we are responsible for the regulation of the South African credit industry, which means we register the credit providers. We only register people who are compliant with the act and people we can monitor. Unregistered providers are completely off our radar which means they are operating illegally,” she stated.

She urges consumers who are in dire need of money to borrow from registered services providers.

“Should you really need to borrow money, call us and find out which companies are registered, alternatively you can ask registration at any institution.”

Singh said consumers should stay alert of unregistered credit providers who usually advertise their services using phrases such as “blacklisted consumers welcome” and “cheap credit”. They often also require a consumer to pay a fee before they pay out the alleged approved loan.

“Unregistered credit providers usually charge excessive interest rates and fees that are not in line with the National Credit Act. They also use unlawful tactics to collect on their debt such as retaining consumers’ identity documents, bank cards / pin numbers, SASSA cards and others, also stay clear of demands for upfront payments because it makes no sense to go somewhere to borrow money but before you are allowed access to the funds you have to pay a fee, that in itself should be a warning sign,” she stressed.

Consumers are advised to only use NCR registered credit providers and report those that retain their instruments such as bank cards to the NCR by calling 086 0627 627 or visit www.NCR.org.za for more information.

It is safe to say that discipline is the only way to survive excessive spending during this time of year.

As parents, it is wise not to create unrealistic expectations when it comes to end of year milestones such as passing to the next grade, expensive holidays away or simply increasing children’s allowances.

Singh said the best thing any parent can do is to include children when drafting holiday budgets so that they are able to fully grasp the concept and implement it into their adult lives. VOC