Clothing account debt among women at dangerous levels


“[Between] women and men, the statistics aren’t that much different, [but] of the credit active consumers who are in arrears of accounts, half of those are women,” Wikus Olivier, debt counsellor at DebtSafe, told CNBC Africa.

“When we look at our statistics from a DebtSafe point of view, the average debt exposure that women have is about 300,000 rand, but not all of those are in arrears, but women have a significant chunk of debt.”

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Olivier added that if customers were in arrears, they were thereafter unlikely to get store credit again. In the past, however, many women did not have the same level of financial freedom as they did today.

Although there is still a large wage gap between women and men, women are nonetheless able to exercise more financial freedom than they did in the past. This freedom, according to Olivier, is however part of the problem.

“Even though [women] have the job, the pay check, can apply for credit, it’s not necessarily big enough pay check to service those debts properly. The banks have more stringent affordability assessments,” Olivier explained.

“In the past you [could get] a clothing account in your post box. I think that’s where people start, especially girls just exiting varsity. They get a job and get into debt at a young age. The same with men: They always start with the clothing accounts.”

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Many clothing accounts are interest free for the first six months, but can go up to over 20 per cent in interest thereafter, similar to credit card interest rates.

The first step to getting out of debt, according to Olivier, is merely paying one’s credit bill when it needs to be paid. Paying on time also avoids the late payment penalties, and keeps one’s credit record intact.

“If you find yourself in a situation where you’re struggling to get by, have a look at your budget [and] look at where and why you are struggling. Then try and make an arrangement with your credit providers. If you do that, always make sure that it is in writing, [and] that you can revert to it. Ask them for more affordable instalments in line with your budget. They can do that,” said Olivier.