Old Mutual has released its 2019 Saving and Investment Monitor, detailing the credit habits of South Africans.
The report is based on 1,000 household interviews among working South Africans living in major metropolitan areas, and examines levels of savings and investment as well as their attitude to finances in general and savings in particular.
The data shows that credit is being used to finance everyday purchases, not just emergencies and large ticket items.
“In order to cope, households are increasingly looking to loans from family and friends or financial institutions to make ends meet,” Odd Mutual said.
Looking at the table below, only 18% of those who use their credit card mainly for everyday purchases like groceries pay their card off in full at the end of the month.
Old Mutual found that 39% of people owe less than R2,000 on their credit card month to month, with just under a third (32%) owing R2,000 – R4,999.
This number steadily decreases based on salaries, with South Africans who earn between R6 000 – R13 999 less likely to pay off their card month to month, compared to someone who earns in excess of R40,000.
While this trend to pay down debt quicker can be seen as a positive, Old Mutual found that more South Africans are turning to store cards to make ends meet.
“A closer look at store cars and credit card usage patterns reveals a reliance on these to fund day to day purchases like groceries rather than this credit being reserved for purchase of large ticket items or to finance emergencies,” it said.