Demand for credit stays high despite success of Credit Act
By Celeste Ganga
17 March 2008
With an increase in the interest rate and the increase of retail goods, new credit applicants may find themselves financially unfit to qualify for credit. Since the implementation of the National Credit Act those who apply for credit are thoroughly screened for credit worthiness. Despite this, the demand for credit is still high.
“Since the new Credit Act, first time credit applicants have more obstacles to cross in lieu of the requirements needed to qualify for credit, and yet, almost forty percent of credit applications to the companies we work with are submitted by credit cadets per month,” says Simon Trupp of PIC Solutions – a credit and risk management company for the retail industry.
He adds that retail trades are an important indication of the demand for credit and this is likely to transfer into inflation. Unfortunately it’s expected that consumers will be heavily affected by the recent power shortages, petrol and interest hikes and may resort to their credit cards as a short term solution.
“In a world where plastic is the main means of payment, retail and credit cards have the advantage of offering consumers convenience. However it’s been the case that consumers use their credit cards to spend money that they don’t have resulting in chronic debt,” says Trupp.
17 March 2008
With an increase in the interest rate and the increase of retail goods, new credit applicants may find themselves financially unfit to qualify for credit. Since the implementation of the National Credit Act those who apply for credit are thoroughly screened for credit worthiness. Despite this, the demand for credit is still high.
“Since the new Credit Act, first time credit applicants have more obstacles to cross in lieu of the requirements needed to qualify for credit, and yet, almost forty percent of credit applications to the companies we work with are submitted by credit cadets per month,” says Simon Trupp of PIC Solutions – a credit and risk management company for the retail industry.
He adds that retail trades are an important indication of the demand for credit and this is likely to transfer into inflation. Unfortunately it’s expected that consumers will be heavily affected by the recent power shortages, petrol and interest hikes and may resort to their credit cards as a short term solution.
“In a world where plastic is the main means of payment, retail and credit cards have the advantage of offering consumers convenience. However it’s been the case that consumers use their credit cards to spend money that they don’t have resulting in chronic debt,” says Trupp.
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