Top 10 common causes of Over-indebtedness
We know that the South African population is over indebted and we have found 10 of the most common reasons why people are in debt.
- Unemployment, retrenchment or salary cuts:
This would be a main cause of applying for credit.
- Hospital bills:
Many South Africans do not have medical aid and most times are not prepared for the unfortunate illnesses which come on their path. Hospital bills can also amount to a large sum for young children who are weak against strong germs or bacteria.
People who are over indebted sometimes forget their taxes are something which needs to be paid. SARS can then penalise civilians who are behind on their taxes.
- Building credit:
Many people think they have the need to build credit in life but soon get carried away with the idea of getting items, clothing and necessities on credit.
- Poor Financial Management:
Many people do not know how to handle money and that the key component in life is to save. Saving would suit the lifestyle for any emergencies or need to have items. Having a piggy bank savings could save you wonders.
People get carried away with the freedom of spending. Some get overwhelmed when they are approved for a credit card they never applied for, but get stuck with credit card debt because their eyes were bigger than their pockets.
Divorce can leave a heavy strain on your bank balance as one has to restart a new life, and even worse if children are involved everything has to be uprooted.
People make personal loans or monthly loans and spend it on get rich quick scams. Con artist usually target people of the middle and lower class knowing how eager they are to make a quick buck. This 9 out of 10 times leave ‘investors in the scam’ penniless and in debt.
- Home and Car Repairs:
Cars and homes are the most unpredictable things you can have as anything can happen at any time. With most people not having home or car insurance they usually have to fork out of their own pockets resulting in short term loans.
- Study loans:
Everyone seeks a better life, and parents urge their children to further their education, yet that comes at a price. Many times parents cannot keep up with university payments and turn to student loans which hangs as a dark cloud of debt over the student and parents.
Should you feel financially burdened with too much high monthly debt repayments; Contact one of our professional Debt Advisors today on 0861 111 159 for FREE consultation or mail us at email@example.com.