For millions of South Africans, credit may be a lifeline, but if the wrong decisions are made that lifeline can soon become a noose.

Figures from the Centre for Risk Analysis, a thinktank in Johannesburg, show household debt climbed above 70% of disposable income in 2024, up sharply from the mid-2000s when it averaged 55%. Over the same period, the household savings rate has slipped close to zero, leaving no cushion against job loss, illness, or a shock rise in interest rates.

Bheki Mahlobo, the Economics and Policy Editor at The Common Sense says the numbers capture: “a society living month-to-month, borrowing to maintain the illusion of stability.”

Behind the statistics lies a psychological trap. Easy credit promises comfort today at the expense of tomorrow’s security. Debt repayments consume income that could have been saved, invested, or used to build small businesses.

The way out begins with simple habits: track every rand, attack high-interest debt first, and aim to save even 5% of income before spending. Consolidation loans and structured repayment plans can help regain breathing space, but discipline must follow.