South Africans have around R2.35 trillion in debt. Yeah, let that sink in.
In fact, over the last few years, South Africans have borrowed billions to maintain their lifestyles amid rising costs and elevated interest rates. Credit has become a go-to, with data from the Reserve Bank revealing that credit card advances increased by 9% in 2023, reflecting consumers’ reliance on credit to purchase necessities and support their lifestyles.
Rising interest rates have and continue to be an imminent threat to the average South African consumer. It’s seen in the price of basic groceries like eggs, bread, and milk. It’s seen in the petrol price. It’s seen in the increasingly terrifying cost of living that pushes peace of mind further and further out of reach.
The Thing About Interest
Think of interest rates as the heartbeat of your financial health. They affect everything from the cost of your mortgage to how much extra you fork over for that new set of wheels. In South Africa, these rates aren’t just numbers on a screen; they’re the pulse of the economy, dictating whether your bank account grows or takes a nosedive.
Here’s the kicker: when interest rates rise, borrowing money becomes pricier. That credit card splurge? It’s suddenly more expensive to pay off. And don’t even get us started on loans – those puppies will start nipping at your heels faster than you can say “compound interest”.
On the flip side, when rates drop, it’s like winning a mini-lottery. Suddenly, your dream of that sleek new smartphone doesn’t seem so far-fetched, and your home loan repayments might even give you a bit of breathing room.
But relying on interest rates is like relying on rain in a drought: Pointless, and disappointing.
The Good, the Bad, and the Scary
According to the Trade Intelligence’s Grocery Shopper Report for 2024/25, the interest rate rose by 475 basis points since November 2021. This has led to an 11.75% prime lending rate increase, significantly increasing the cost of paying off debt such as car and home loans.
Trade Intelligence also points out that 9.9 million credit-active consumers have missed more than three monthly repayments, placing them in significant financial distress.
South Africa’s ‘Big Four’ banks – Absa, FNB, Standard Bank, and Nedbank – are projected to experience a R53 billion loss from non-performing loans in the current financial year.
And while the Trade Intelligence report projects an inflationary decrease is coming soon, they warn that the effects won’t be felt for a very long time.
So What Can We Do?
It’s a scary situation, and it can easily feel like there’s no way out. However, there is some respite. While we can’t help with your home and car loans, Rentoza can help lighten your dependence on credit.
How? Well, we don’t do credit. In fact, we want to kill it entirely. That’s why we’ve cut credit out of the equation. Instead, we verify customers with our own in-house verification system that looks at your financial behaviour, not your credit score.
With Rentoza, you don’t have to ride the never-ending wave of changing interest rates. Our non-credit subscriptions give you more freedom and flexibility to get the items you really want, without the stress of whether you’ll be able to afford it in a few month’s time.
Want the latest tech without the hefty upfront cost? Done. Need a hefty portable power station to keep you up and running during load shedding? Easy peasy. Don’t turn to credit and fall into a deeper debt hole. Subscribe instead and pay affordable, month-to-month payments. With access to everything from electronics and appliances, to baby goods and fitness gear, we’ve got you covered for every part of your lifestyle.
Subscribing with Rentoza isn’t just about keeping up with the Joneses (who needs that stress?). It’s about embracing financial freedom. You choose what you want, when you want it, without the financial shackles. Plus, with Rentoza’s flexible terms, you can swap, upgrade, or pause your subscription faster than you can say “I deserve the latest and greatest”. And did we mention it’s all penalty-free?
It’s time to take control of your finances and say goodbye to the fear of interest rates. Join the subscription revolution today!
Credit is dead. Long live subscriptions.
Commitment is messy. Just Rentoza it.
