Credit Association urges consumers to borrow wisely as Januworry kicks in

Now that the festive season is over and South Africans have spent every cent they could and could not spare, Januworry has arrived with its own expenses that have to be paid, such as children returning to school, which requires new uniforms and stationery.

But what do you do if you did not make provision for Januworry? Borrow money and make more debt?

While borrowing money could be the only way out, the Credit Association of South Africa (CASA) is encouraging consumers to make careful, responsible credit decisions and encourages South Africans to borrow only from credit providers who are legally registered with the National Credit Regulator (NCR).

“This time of year typically places additional strain on household budgets. Factors such as gifting, travel, social events, January ‘back-to-school’ costs and family commitments can tempt consumers to take on debt they cannot afford,” Leonie van Pletzen, CEO of CASA, says.

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CASA is a South African association representing professional non-bank credit providers and enables credit providers to thrive and build a sustainable credit industry that supports economic growth and financial inclusion across South Africa.

It is a member-based, non-profit association governed by an annual general meeting, an elected board, and specialised board committees. CASA is registered as a Section 21 Company.

Van Pletzen warns that poor decisions consumers make over this period often lead to severe financial pressure early in the new year.

“Credit can be a helpful tool, but only if used responsibly through registered providers who comply with the law and prioritise the protection of consumers. Informal or illegal lending continues to target vulnerable households over this period, making awareness and accountable decision-making more important than ever.”

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She warns that the end-of-year holiday season often places extra pressure on budgets. Van Pletzen shares these tips that serve as a guide to help protect financial well-being for consumers:

#1: Set a realistic festive-season budget: Plan for all expected expenses, such as gifts, food, travel, entertainment, fuel, school fees and January essentials. Only spend what you can genuinely afford and not what you hope you will have.

Although these tips are a bit late to help this year, consumers should keep them in mind for the end of this year.

#2: Only borrow if you can afford to repay it: Before applying for credit, calculate your monthly repayment and check whether it fits comfortably into your budget after covering your essential living costs. If it will cause stress or force you to skip other payments, rather avoid the loan.

#3: Borrow only from NCR-registered credit providers: Your safety matters. An NCR-registered provider must follow the law, explain all costs and treat you fairly. Always ask for the provider’s NCRCP number and verify it with the NCR.

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#4: Use your bonus or thirteenth cheque smartly: This reduces the need to borrow later. Instead of spending it all immediately, consider:

• paying off existing debt
• boosting your savings, or
• preparing for January expenses.

#5: Prioritise essential expenses first: Your household bills, school fees, transport and food budget must come before festive spending. A strong focus on essentials now prevents financial pressure.

#6: Read and understand your credit agreement: If anything is unclear, ask questions until you are confident you understand all the terms and conditions. Never sign a contract you do not fully understand. Before signing anything, make sure you clearly understand:

• the full interest rate
• all fees and charges
• repayment dates and instalment amounts
• penalties for late or missed payments.

#7: Protect your personal documents and banking information: A legal credit provider will never ask to keep or withhold your ID, bank card, PIN, or SASSA card. If a microlender requires this, walk away immediately. It is illegal.

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“As we exit the festive season, we encourage all South Africans to still stay alert, protect themselves and avoid the traps of illegal and informal lending.

“Borrow only when necessary, only what you can afford to pay back and only from providers who operate within the legal framework.

“Your financial well-being in January and beyond depends on the decisions you make now.”