Before you begin to fill your shopping cart with Black Friday deals, you may want to consider whether you are incurring debt that is not necessary. The 2024 edition of Black Friday saw a significant increase in consumer spending. Capitec Bank recorded a 27% increase year-on-year, with customers spending R25.45bn collectively over the weekend. FNB processed over R5.4bn in transactions, highlighting the event’s economic significance.Avoid the temptation to purchase non-essential items, even if they appear to be heavily discounted.— Chris Coetzee, CEO of FinFixWhile these figures underscore the event’s economic impact, they also raise concerns about consumer behaviour, particularly regarding overspending and the potential for accumulating high-interest debt.Chris Coetzee, CEO of FinFix, and other financial experts caution that the allure of “limited time offers” Retailers use psychological tricks to get people to spend during Black Friday sales. Words like urgency can be used as a strategy to encourage spending during Black Friday sales. “limited stock”Scarcity “only three left”And the fear of being left out. “FOMO”He said that. “The rapid adoption of BNPL [Buy Now, Pay Later] services in SA further raises concerns. While these services offer short-term financial relief, they can contribute to long-term debt accumulation,” said Coetzee. The National Credit Regulator’s Credit Bureau Monitor recently reported that 23% of consumers missed instalment payments, indicating that a significant portion of the population is struggling with debt repayment. “Additionally, the South African Reserve Bank’s Payments Study report highlighted that a substantial number of consumers are increasingly relying on digital credit options, including BNPL, to finance their purchases. This shift towards digital credit, coupled with existing financial pressures, exacerbates the risk of over-indebtedness,” said Coetzee. The debttrap: Short-term gains, long-term painRelying upon credit to fund Black Friday purchase can cause significant financial strain.“High interest rates on unsecured loans exacerbate the situation. Unplanned credit-based purchases can quickly escalate into unmanageable debt, impacting individuals’ ability to save for essential goals such as home ownership, education, and retirement,” Coetzee stated.Strategies to smart shoppingCoetzee noted that in order to avoid falling into debt traps during Black Friday sales, it is important to consider the following strategies. Identify items you absolutely need and create a budget. Avoid the temptation of buying non-essential products, even when they are heavily discounted. Avoid using credit cards to finance purchases if possible. You should understand the terms of repayment and interest rates if you need to use credit. It’s important to exercise caution and self-discipline when managing money to avoid overspending.Do your research. Compare prices between retailers to verify that the discounts offered are not exaggerated. This can help you to make rational decisions. Seek advice from financial professionals in order to determine the affordability of major purchases and develop a sustainable plan. Financial literacy can be the most effective tool to prevent unplanned expenditures and fraud. Don’t spend more than you can affordWhile Black Friday presents opportunities for savings, it also poses risks of overspending and accumulating debt. Although loans can give you immediate buying power, they may also put you in a financial bind if your repayment schedules are not managed properly. “The lack of comprehensive credit reporting for BNPL transactions, for example, means that consumers may accumulate multiple debts across different platforms without realising the full extent of their financial obligations,” said Coetzee. “This lack of visibility can result in escalating interest charges, deepening the cycle of debt. By approaching the event with a disciplined and informed mindset, consumers can capitalise on genuine deals without compromising their financial well-being.” Sowetan
2025-10-27 06:23:55
Shop smart, avoid debt this Black Friday
