As consumers feel the pinch, personal debt has become more tempting than ever. That’s why healthy credit habits are so important, says Hippo.co.za CEO Bradley Du Chenne.
Many South African households have seen their credit health deteriorating significantly since the start of the COVID-19 pandemic. Jobs have been lost, incomes reduced and savings spent – all of which puts the spotlight on a national need for healthy credit habits. South Africans across the board need to pay close attention to paying their accounts, servicing their loans, managing their credit cards and settling their debts, says Bradley Du Chenne, CEO of comparison platform Hippo.co.za.
“If the opening months of 2021 have shown us anything, it’s that 2020 isn’t done with us yet,” says Du Chenne. “The economic effects of last year’s COVID-19 outbreak are still being felt, even as South Africa starts a vaccine rollout aimed at ending the pandemic. And as cash-strapped consumers continue to tighten their belts and budgets under increasing fuel prices and continuing financial pressure, the need for healthy credit habits is growing stronger than ever.”
He recommends four good credit habits which all South African consumers should develop.
#1: PAYING ACCOUNTS ON TIME
When it comes to paying your accounts, the golden rule is to pay every bill on time, every time. “A missed or late payment could have a negative impact on your personal credit score, which lenders use to determine whether or not to provide you with credit in the future,” Du Chenne warns.
#2: COMPARING LOAN OPTIONS
Many South African consumers turn to personal loans to help them make ends meet. “Taking out a personal loan is a big financial decision and one that no one should make lightly or blindly,” says Du Chenne. “You should only take out a loan if the repayments are well within your affordability range. Also, make it a habit to compare offers on all financial products – from personal loans to home loans and vehicle finance – side by side, with all the information clearly visible. It’s the best way to make informed decisions and avoid nasty surprises.”
#3: CHECKING FOR EXTRA FEES
Most consumers know that interest is charged on credit card debt, but as Du Chenne warns, interest is not the only fee banks will charge you. “Depending on the bank or account, you can also be charged an initiation fee when you first open a credit account, a monthly account fee and international transaction fees,” he says. “When researching which credit card is best for your needs, make sure you understand all the fees involved and how they – plus the interest payments – make up the full cost of the card.”
#4: MANAGING DEBT
Debt counselling and consolidation can be the life-saving element of poorly managed personal loans. But if you communicate effectively with your creditors, you might not need those services. “If you find you can’t pay what you owe them this month, give them a call and try to arrange alternative payment solutions,” says Du Chenne. “Lenders have policies in place to assist with requests for relaxed payment terms during difficult times.”
* This article does not constitute financial advice
Established in 2007, Hippo.co.za is South Africa’s leading comparison website that helps consumers save money by comparing a range of South African providers across financial products such as Car Insurance, Household Insurance, Life Insurance, Medical Aid and more. Hippo.co.za is free to use and saves consumers the time and hassle of shopping around for the best deal since the Hippo.co.za website instantly retrieves real-time quotes from the different providers using the latest Internet technology. You could save by using Hippo.co.za to compare before you buy or switch to a new provider.
Hippo.co.za makes money by simply charging its partners a fee when a customer chooses to find out more about their products. The results consumers see, and the order in which they are presented, are in no way influenced by the fee Hippo.co.za charges its partners or any other factors other than the price of the product being compared. The price you see on Hippo is the same as going directly to the insurer.
For more information, visit us on www.hippo.co.za, connect with Hippo.co.za on LinkedIn, http://www.linkedin.com/company/hippo-comparative-services-pty-ltd/, like us on Facebook, www.facebook.com/HippoSA, and follow us on Twitter, @Hippo_co_za, YouTube, http://www.youtube.com/user/hippocompare and Instagram https://www.instagram.com/hippo.co.za/.
Hippo Comparative Services (Pty) Ltd is an authorized financial services provider (FSP number: 16357). Terms and Conditions apply.