The National Financial Ombud (NFO) has warned consumers against getting in the red by Black Friday impulse buying without a budget or plan.
Howard Gabriels, Credit Division lead ombud at the NFO, urged credit-active South Africans to exercise caution and avoid the financial pitfalls associated with spending on a whim and accumulating debt that lasts far beyond the sales season.
“With enticing discounts and limited-time offers on the horizon, many consumers face the risk of accumulating high-interest debt, jeopardising their long-term financial goals and well-being.
“Black Friday can be a double-edged sword for those relying on credit to fund purchases because while the discounted offers can seem like an opportunity to save, the financial aftermath can be severe.
“Unplanned, credit-based purchases can quickly escalate into unmanageable debt, impacting people’s ability to save for homes, education, retirement, or even essential emergencies,” said Gabriels.
The NFO said the most impactful financial gains come from disciplined spending rather than seasonal discounts.
“It is imperative that before you even think of shopping, you calculate your debt-to-income ratio, taking into account all that you owe, from rent to home loans, credit cards, car payments and other debt payments.
“Also, before diving into the sales, take the time to research products and prices. If a deal seems too good to be true, then it is. Familiarise yourself with a retailer’s usual pricing to identify when discounts are genuinely impressive versus when they are built on inflated prices,” Gabriels added.
The NFO advised consumers to set a spending budget, avoid high-interest credit options, prioritise long-term financial goals, ensure you have an emergency fund and monitor credit usage.
Gabriels said the NFO can investigate and resolve any unresolved credit-related problems that arise between consumers and credit providers including micro-financers, non-bank credit lenders, banks, clothing and furniture stores, and telecommunication companies.
Consumers may also complain about being declined credit without reasons provided, incorrect credit bureaus listings, contractual disputes, reckless lending allegations, disputed fraudulent purchases on accounts, debt prescription disputes, and more.
Cape Times