{
  "id": 1855037,
  "title": "SPENDING AND SAVING: Use loans and credit wisely and avoid falling into the debt spiral",
  "url": "https://urgent.news/2026/08/19/spending-and-saving-use-loans-and-credit-wisely-and-avoid-falling",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-19T03:28:50.000Z",
  "source": {
    "name": "Daily Maverick",
    "slug": "daily-maverick",
    "url": "https://www.dailymaverick.co.za/article/2026-08-19-use-loans-and-credit-wisely-and-avoid-falling-into-the-debt-spiral/"
  },
  "original_language": "en",
  "account": "Many South Africans are borrowing money to cover the gap between their earnings and essential expenses. This debt spiral often starts with small gaps, such as the time between payday and the end of the month, or the difference between a household's income and the rising costs of living. The warning signs are clear: borrowing to pay off existing debt is a major red flag.\n\nAccording to the 2026 Consumer Pulse Study by TransUnion, 39% of South Africans anticipate missing at least one bill or loan payment, while 79% cite inflation as one of their top financial concerns. Additionally, 53% have reduced discretionary spending, such as dining out or traveling, due to the rising costs.\n\nAyesha Hatea, director of research and consulting at TransUnion, notes that \"financial optimism has decreased to 66% from 71% in the second quarter of 2025, with pessimism rising to 19%.\" This shift in mindset is reflected in consumers' cautious credit behavior, as they grapple with the shrinking margin of error in managing their finances.\n\nWhile younger consumers tend to use credit responsibly, often leveraging credit cards to manage cash flow or consolidating debt, the Sanlam Benchmark Survey reveals a growing concern for retirement. Kanyisa Mkhize, CEO of Sanlam Corporate, emphasizes that people are making retirement decisions in a challenging economic environment and need assistance in managing debt before it spirals out of control.\n\nTo break the debt cycle, experts recommend listing all debts along with their interest rates and repayment terms, prioritizing the repayment of the most expensive debt while ensuring that essential expenses are met. Crucially, avoid using new debt to pay off existing debt. By confronting the issue head-on and adopting a disciplined approach to credit management, consumers can prevent the debt spiral from taking hold.",
  "summary": "Many people are borrowing to bridge the gap between earnings and essential expenses.",
  "key_points": [
    "39% of South Africans anticipate missing at least one bill or loan payment.",
    "Inflation cited as top financial concern by 79% of respondents.",
    "Financial optimism drops to 66%, pessimism rises to 19%."
  ],
  "editors_take": "Growing financial pessimism and rising inflation concerns are driving South Africans to re-evaluate their debt management, with experts warning against borrowing to pay off existing debt to avoid a debt spiral.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}