Experian’s latest Consumer Default Index (CDI) shows a 14% improvement in default rates, meaning fewer people are missing their credit repayments. At first glance, Nyathi recognises, many in the financial industry might see this as a sign that consumers are doing better.
However, she warns that this is only part of the story.
“These numbers can create a dangerous illusion,” says Nyathi. “What we’re seeing is not necessarily a real recovery in household finances. In many cases, it’s simply that banks and formal lenders are saying ‘no’ more often. The people who would have defaulted are just not getting access to credit in the first place.”
At the same time, households remain under intense pressure from rising living costs, especially food, transport and healthcare, while many salaries have stayed flat. To cope, families are often forced to look for other ways to get by, turning to informal lenders, instant cash offers or multiple small loans that end up costing far more over time.
The result is that millions of people are being pushed into debt they cannot afford and become stuck in a cycle of borrowing simply to survive.
“As the realities of the new year settle in, 2026 is likely to expose just how financially vulnerable many households still are,” she explains. “This makes now a crucial time for consumers to look honestly at how they are using credit, make careful choices, and start building financial resilience before the real pressures of the year ahead fully hit.”
Nyathi stresses that consumers are not powerless.
“You still have choices, and you can use them,” she says. “Your first act of financial courage is simple, even if it feels difficult at first.”
Face your full debt reality and create a simple, honest plan
According to Nyathi, you cannot fix what you refuse to look at. The first step out of unmanageable debt is to know exactly where you stand.
Write down every cent you owe; who you owe, how much, the monthly instalment and, if possible, the interest rate. Debt should then be sorted from most dangerous to least, for example; loan sharks and informal lenders, high-interest personal loans, credit cards, overdrafts and retail store cards, and then lower-interest debts such as certain long-term loans.
She recommends that people pay at least the minimum on all, but choose one debt to attack at a time, to pay off faster. When that’s cleared, move to the next.
“If you can see that you won’t be able to pay, don’t wait for things to get worse,” Nyathi says. “Talk to your creditors early and ask about lower instalments or longer repayment terms. Facing the truth is hard, but it is the only way to start taking back control.”
Break the “credit-to-survive” cycle and protect your monthly cash flow
One of the main reasons debt becomes unmanageable, Nyathi explains, is that people use new credit to cover everyday basics such as groceries, transport and school costs, and then struggle even more the following month.
She recommends that consumers draw up a simple bare-bones budget for the next few months that covers only essential items:
- Rent or bond
- Food
- Transport
- Insurance and investments
- Electricity and other utilities
- School fees
- Minimum debt repayments
“Cut out what you can,” Nyathi says. “Look at subscriptions like unused gym memberships and streaming services, takeaways, upgrades and other non-essential spending. Every rand you free up helps you breathe a little easier.”
Before taking any new credit, she suggests asking a few honest questions; will this help you earn more money or reduce your costs in the long term? Or is it just helping you get through this month while making next month harder?
“Avoid loan sharks and instant cash offers,” Nyathi warns. “They often come with extremely high interest and hidden fees that can quickly turn a small problem into a crisis. If you already feel trapped, rather speak to a qualified financial adviser rather than taking another expensive loan. You need a realistic repayment plan, not another quick fix.”
Build small resilience habits so you’re less dependent on debt in future
Nyathi emphasises that getting out of the debt trap is not only about paying off what you owe today. It is also about changing how you handle money in the future, so you do not end up in the same position again.
“This means building small, everyday habits that protect you when life happens, instead of turning to credit every time there is a crisis,” she explains and recommends that consumers:
- Start a small emergency savings buffer, even R50 or R100 a month, in a separate account, and use it only for real emergencies such as medical needs, urgent repairs or unexpected job loss.
- Before making a large purchase on credit, wait 48 hours and ask yourself whether you truly need it, or whether saving up and paying cash would be the wiser option.
- Set defined limits on monthly financial support to family, and avoid assuming debt or opening store accounts in your own name on behalf of others.
“In a country where unsustainable debt has become normal, choosing to step out of the cycle is a quiet act of rebellion, and one of the most powerful gifts anyone can give themselves and their family,” Nyathi concludes. “Credit has become a band-aid solution, not a pathway to financial stability. When people use debt to cover essential expenses they can’t afford, they are not solving the problem; they are intensifying it.”
