You cannot borrow your way out of debt, warns Debt Rescue

South Africans, who are already battling with the rising cost of living, will now have to fork out 19% more for electricity from April.

National energy regulator Nersa announced the new tariffs for the 2023/2024 financial year on Thursday.

Roets says people are still feeling the impact of Covid on their finances.

"We have seen a dramatic increase in people seeking debt counselling and debt review. That was expected because Covid left a lot of people in very difficult situations financially, but that coupled with the fact that credit providers are now starting to aggressively select on their debt it is just making it impossible for people to survive.

"That is why we are seeing a dramatic increase of people  applying for debt review, which is on the one hand a very big concern because it shows how people are struggling in South Africa, but it also shows that people agree that there is a solution if they do find themselves in situations like that."

Roets adds that a lack financial literacy remains a massive problem.

"Unfortunately, we have been struggling with the lack of financial literacy in South Africa for a very long time now and people should know that you cannot borrow your way out of debt. If you are over-indebted, or struggling financially, a loan is not going to get you out of trouble.

“You will have just one more thing to pay on a monthly basis so that's why there is debt review, debt counselling that can help people to pay off their debt in an affordable manner and at the same time protect their assets."

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