Find the best strategies for your debts!
According to recent data from the National Credit Regulator (NCR), more than 40% of credit consumers in the country are behind on their payments.
This text presents some of the best strategies for South African workers who want to pay off their debts and build a more stable financial future.
1. Understanding the reality of debt
The first step is to recognize the size of the problem, which is difficult since many people avoid looking closely at their bank statements or credit card bills.
Make a list of all your debts: the total amount, the interest rate, and the minimum monthly payment, so you can face the situation head-on.
This mapping helps bring clarity about which debts should be prioritized and which can be managed over the long term.
2. The “snowball” method
Very popular among financial experts, the “snowball” method consists of prioritizing the repayment of the smallest debt first while paying only the minimum on the others.
Imagine a worker in Durban who owes 5,000 rand on a credit card, 15,000 rand on a personal loan, and 100,000 rand on a car loan.
With the snowball method, he focuses on eliminating the 5,000 rand first.
3. The “avalanche” method
Another strategy is the “avalanche” method, which prioritizes debts with the highest interest rates — basically the opposite of the snowball method.
Unlike snowball, here the focus is mathematical: you pay off what costs you the most in interest first, saving money in the long run.
For example, if a worker in Johannesburg has a 20,000 rand loan at 22% interest and another of 50,000 rand at 12%, he should focus his efforts on the 22% one.
4. Negotiating with creditors
In South Africa, many financial institutions are open to renegotiating payment terms, especially to recover at least part of the debt.
Banks like Standard Bank, Absa, and Nedbank have debt restructuring programs, particularly when the consumer shows willingness to pay.
Negotiation can result in a lower interest rate, an extended repayment period, or the consolidation of multiple debts into a single monthly payment.
5. Avoiding new debt
One of the biggest mistakes indebted workers make is continuing to take on credit while trying to pay off what they already owe.
Buying nonessential items on credit, such as electronics or branded clothing, can compromise the entire debt recovery effort.
The first step is to freeze credit card use, relying instead on debit or cash for daily purchases, keeping expenses under control.
6. Creating a realistic budget
Without a clear budget plan, it’s nearly impossible to get out of debt.
The South African worker needs to account not only for fixed expenses — rent, public transport, basic food — but also variable ones such as leisure and occasional shopping.
Digital tools like 22seven or local bank apps provide support for tracking expenses and setting savings goals.
The key is to be realistic: cutting all leisure expenses can lead to frustration and setbacks, while balancing needs and small pleasures helps keep the plan sustainable.
7. The importance of extra income
In a context of high unemployment, many workers take on side jobs to supplement their income.
Delivery services, selling homemade products, or even freelancing online on international platforms can generate significant extra cash.
The extra money goes entirely toward debt repayment, speeding up the payoff process.
8. Professional support: credit counselling
In South Africa, there is the debt counselling mechanism, regulated by the National Credit Act.
The process allows over-indebted consumers to seek registered credit counsellors, who mediate negotiations with creditors and establish viable repayment plans.
Although it is a more drastic measure, it can be crucial to avoid personal bankruptcy or even asset loss.
Credit counselling also provides financial education, helping prevent people from falling into debt again.
9. The psychological aspect of debt
It’s important to recognize that dealing with debt is not only a mathematical issue but also an emotional one.
Anxiety, shame, and stress can compromise mental health and even family relationships.
That’s why it’s essential to adopt self-care strategies, such as sharing the situation with family members, joining support groups, or even seeking psychological counselling.
