Black Friday fever is here; Consumers are cautioned against making reckless spending decisions and are encouraged to be responsible spenders this Black Friday. Consumers should first draw up a list, separating their “needs” from their “wants”, then look into their budget to determine whether there are funds available for the intended purchase, so as to avoid unnecessary future financial difficulties.
If a consumer has no surplus funds and has the only option to buy on credit, they need to consider the credit-related costs that they will incur and their ability to repay the debt and then decide whether it is worth spending on credit for Black Friday.
If consumers did not plan or budget for Black Friday, they are cautioned not to use credit to make these purchases. Credit purchases are more expensive over the long run than the short term Black Friday savings discount. When you buy on credit, you will be liable for related costs such as interest, monthly service fees, once-off initiation fees and credit life insurance to name but a few.
Consumers should never take for granted the value of planning and budgeting. By drawing up a list of your needs, income and expenditure, you avoid falling into the trap of buying things you do not need and/or cannot afford.
Love it or hate it, Black Friday has become a big part of our shopping calendar. While it is relatively new in South Africa, its growth in popularity has been astounding. Black Friday is an informal name for the Friday after Thanksgiving in the United States, which is now regarded as the start of the Christmas shopping season.
By budgeting, you will be ensuring that your spending is within your means. Although Black Friday may indeed be providing consumers with an opportunity to buy goods on special and discounted prices, consumers need to make use of this opportunity in a responsible and cost effective way.
Buying on credit without a plan may lead to the inability to pay the credit granted. Should the consumer be in a position not to repay the credit, credit providers will take legal action, and this will negatively affect your credit record. Once you have a negative record as a consumer, not only will accessing future credit be a struggle, but it will also be more expensive, because credit providers will charge you higher interest rates in comparison to those who have positive credit records. This can also affect people seeking employment in cases where the job requires you to be financially sound.
Reckless and impulsive buying on credit for unplanned Black Friday specials will not be saving consumers any money. Consumers should not allow Black Friday to lead to a “Blacklisting” and letting a one-day event lead to a lifetime of struggle.
Helpful tips for consumers for Black Friday:
- Plan and draw up a list of what you need.
- Set a realistic budget of what you can afford to spend and stick to it.
- Check the items and prices before Black Friday to do a comparison on the prices and to ensure that you are getting a better deal.
- Should you decide to buy, stick to what is on the list.
- If buying on credit, consider the related costs; you may not be saving.
- If buying on credit, consider your ability to repay the debt; you may be signing up for financial troubles.
- Remember, Cash is king!
- Remember, not everything is really a deal, some items may be reduced even further closer to Christmas time.
- Avoid buying food on credit.
- Do not forget to conduct a financial health check and get a free copy of your credit report from registered credit bureaus on the NCR’s website: www.ncr.org.za.or call 0860 627 627
About The National Credit Regulator
The National Credit Regulator (NCR) was established in terms of the National Credit Act 34 of 2005 (the Act) and is responsible for the regulation of the South African credit industry. The NCR offers education and protection to consumers of credit in promotion of a South African credit market that is fair, transparent, accessible and dynamic. For more information, go to https://www.ncr.org.za. or call 0860 627 627