The growth in debt…..
The percentage of adults in South Africa with a retail store card increased from 13.5% in 2004 to 16.2% in 2007 (AMPS trends)This stat may give us some indication why we are in the state that we are in terms of the global credit crunch. Some quick research indicated that there were around 10 million “credit” cards (6 million credit cards and 4 million store or charge cards) in circulation at the end of 2007. This means that almost half of the 20.49 million economically active folks out there have credit facilities.
Total “credit” transactions amounted to somewhere around R 145 billion (2007) across this spectrum, it is a difficult to understand exactly how much of this was truly credit based. Never-the-less this number equates to around R 14 500.00 per person with a card for the year. This number does not sound particularly high but put into the context that the GDP per individual is around R 76 440.00 per person per year, this put credit expenditure at around 18.31% of total income. When one factors in what the repayments must be etc, then we can see the impact of credit buying is having on us all.
We need to move people to the understanding that credit purchasing is to be done in a controlled environment, we need to educate everyone in terms of the pitfalls of buying on credit. The cost of money is high and we should reserve these purchases to one’s that are truly a necessity.
