Let's talk about the real reason why so many of us fall into debt these days


The other day Pick n Pay announced that it will be offering a credit card. A lot of people were not happy with that decision.

The National Credit Regulator (NCR) earlier this year reported that consumers owed R1.6 trillion. The NCR also said that 57% of unsecured lending was given to people who earned less than R15 000 a month.  Debt Rescue’s  in-house statistics showed that men made up 49% of the indebted consumers while women came in first with 51%.

Debt Rescue listed three areas where outstanding debt is most prevalent:

Personal loans (94%)
Credit cards (84%)
Store cards (76%)

Debt Rescue also said more than half of all consumers owe 75% or more of their income to creditors.

Clearly we have a crisis.

I asked people who were not happy with Pick n Pay's move, what is the difference between Pick n Pay and Woolworths card? Most people have Woolworths cards and their food is really expensive. I was really hoping to get a debate going but I got the standard response of "credit cards are bad and more people will be going into debt". People are already in debt and this has nothing to do with Pick n Pay! Numbers don't lie.

So are credit cards really a problem?

It's important that we address the real issues of why people go into debt instead of demonising credit cards. So why do you think we so easily fall into debt these days?

Debt takes over people’s lives for different reasons. I know some people who just got in over their heads without realising it. I also know others who live their lives in massive consumer debt because they are immature and want everything immediately.

I can tell you why I got into debt. I got int to debt because I didn't have clue as to how much interest I was paying on my credit card; nor did I know the implications of "minimum payments." I also didn't know how money works, how to budget or how to manage personal finances. Financial illiteracy led me to debt.

I recently did a bit of research. What I found is that there are various reasons why we fall into debt. And some of those reasons are shared by some of the women I interviewed for my blog. Here is what they had to say:

We're too drawn in by what other people have. Don't buy the flashy car if you can't afford to maintain it and pay the installments. You don't want to struggle to eat every month just so you can look good - Pippa Tshabalala

Because we choose short term satisfaction over our long-term goals. I’m totally guilty of this. We say things like ‘but I deserve it’ or ‘this is an emergency’ when really we know it’s not. In those moments I’m learning to take a step back or sleep on it before I so easily swipe that card. 90% of the time, I don’t end up doing it - Carly Barnes 

Cost of living is getting higher and higher, and sometimes the debt that we get ourselves into is unavoidable. Also we are the instant gratification generation, as a result we don't always make the best financial decisions - Salamina Mosese

FOMO (the Fear of Missing Out) – Social media paints an overly perfect picture of people’s lives and makes everyone’s life look like a constant ball of fun. People don’t necessarily post pictures when they miss out on events or the price they are paying for their extravagant lifestyles – anyone can “afford” nice vacations and expensive clothes if they have enough credit cards. Social media definitely adds some pressure on how people spend their money – even money they don’t have - Lungile Mashigo

When I look at the world around us compared to a few years ago there's far more money and marketing traps are easily available. And it's so easy to fall into them if you don't monitor yourself. You know that feeling when you walk into a fashion shop and all you want to do is buy and when you get home with the items you don't even wear it. Too many of us are influenced by that and by the media and social media portrayal of 'socialites' and celebrities living the life when in actual fact they're only providing a service to the entertainment industry. Be aware of how this affects you and empower yourself to know better. Never live beyond your means - Kia Johnson

I'm curious to hear your thoughts. So, let's talk about the real reason why so many of us fall into debt these days.  You can share your thoughts below.
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