The record low interest rates and reduced cost of credit gives consumers an opportunity to better manage their money by making smart decisions on credit.
Philani Potwana, FNB CEO of Entry Market says, “in the last year, consumers who have credit that is linked to interest rates have benefitted from consistent rate cuts. While indication is that the rate cut cycle may be coming to an end, the cost of credit remains relatively low and those who have managed their credit responsibly have better opportunities to unlock value to get the most suitable credit for their needs.”
The view is echoed by Emma Mer, CEO of FNB Retail Loans, who says consumers who have a good credit score have more options to get the most suitable credit. This is very important, because these consumers have several types of credit to choose from, depending on the need. In addition to this, consumers who have not maintained their credit obligation have a chance to use the record low interest rates to improve their prospects, she says.
Six tips to help you get the most suitable credit for your needs
Potwana and Mer share tips to help you boost your prospects of getting the most suitable credit for your needs:
- Stay committed to your current credit obligations
It is always beneficial to make regular payments for all your credit obligations and if you’re unable to pay the amounts due on your accounts in full, arrange with your credit provider for alternative measures. If you keep up with your payments, it becomes easy for a credit provider to re-evaluate your interest rate since you’ve proven to responsibly manage your credit.
- Do not reverse authorised debit orders
Reversing your authorised debit orders will negatively impact your account and credit score, which may affect your ability to get credit. Always allow your debit orders to go through as planned.
- Have enough funds to avoid unnecessary penalties
Align your debit orders with your salary date. This will ensure that your credit commitments such as funeral cover, loans or credit cards are paid as you get paid. In the event that the transaction is declined because of insufficient funds, you will be held liable to pay a penalty fee which will have a negative impact on your credit score.
- Pay more than your minimum payment
The minimum monthly payment listed on your statement is the lowest amount you can pay on your account to remain in good standing with your credit commitments. Strive to pay any amount more than the monthly minimum even by R50 depending on the amount of the debt, but only if you can. If you keep it up, you’ll lower the long-term cost of your debt.
- Make sure you have savings for a rainy day
The response to the COVID-19 pandemic has taught many of us about the importance of having emergency savings for a rainy day. The conversation of saving can be intimidating and often customers are strapped for cash and don’t have the means to save large amounts of money. Consider starting small by activating bank-your-change on your account on the FNB App – it automatically helps you save as you swipe your card on your everyday purchases and rounds off to the nearest rand. Come year-end you would have built up an impressive balance. Having additional funds, will improve your credit rating, putting you in good standing for lending.
- Track your spending
You can either track your spending habits on your own or use our tracking tool, nav »Money on the FNB App. Nav » is a digital solution offering smart tools to track your money to understand if you will make it for the month, view your credit status and save smart. We are constantly working to ensure that we ease our customers’ financial burdens by supporting them through simple, cost-effective financial solutions that give them value, including a broad range of safe & secure banking channels to help them manage their money.
“Incremental changes in money management behavior can help consumers to maximise the potential of credit solutions. As FNB, we are committed to providing customers with the right credit solution to meet their individual and/or family needs. Furthermore, customers have several channels they can use to take up the right credit anywhere, anytime,” concludes Potwana.