Bheki Mahlobo, Economics and Policy Editor at The Common Sense, warns South African households to avoid taking on more credit card debt as tough economic conditions raise the risk of financial distress. With stagnant growth, rising joblessness, and higher debt-servicing costs, he argues that households should focus on reducing credit balances and building up savings for emergencies.

“With the economy stagnant and the unemployment rate at 32.9%, the temptation to use credit cards to cover monthly shortfalls is understandable, but it is risky,” Mahlobo says.

Official figures show household debt as a share of disposable income remains above 60.0%, a level that has persisted for more than a decade and remains well above early 2000s levels. With credit card interest rates averaging well above the prime lending rate, the cost of carrying balances is rising. “Families paying only the minimum amount on credit cards are losing ground every month,” Mahlobo adds. “That leaves them exposed to sudden shocks, whether from job losses or rate hikes.”

He notes that the combination of stagnant employment, falling consumer confidence, and higher debt-servicing costs is squeezing many households. “It is critical to focus on paying down high-interest debt and building up a cushion of savings. Credit cards should not be a substitute for income or long-term planning,” Mahlobo says.

With no quick economic recovery on the horizon, he advises households to avoid new credit and prioritise financial resilience. “Tough times call for tough choices – and that means saying no to easy debt, however tempting.”

South Africans who act now to cut debt and build savings will be best placed to weather the next shock. Those who ignore the warning risk being caught in a tightening debt trap that is difficult to escape.