Among the ‘mass credit market’, the employed lower middleclass total credit card balances are up 17% since last year. Moneyweb Debt
The South African middle class may be broke, but rising interest rates, a weakening rand and the impact of load shedding is affecting the wealthiest 5% of the population too. Eighty20’s latest credit stress report shows that loans newly in default were up by 17% in the first quarter. It says this is being driven by a 27% jump in overall new home loan defaults and a 12% increase in defaults of vehicle finance accounts.
The number of new defaults is up 22% for home loans and 32% for vehicle and asset finance. The instalment-to-income ratio breached the 70% mark , suggesting they are relying on credit card debt to make ends meet. Average balances are up 8% to R31 000, with average overdue balances as a percentage of total balances at 19%. The data is even scarier among the ‘mass credit market’ – the employed lower middle class. Here, total credit card balances are up 17% since last year.
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