Article: Younger people falling into debt trouble, quickly

I seriously don't understand how someone with stable employment can have a problem with debt. I think the problem is that people don't adequately budget for bad debts like credit cards and overdrafts. The only things you should be going into debt with are big assets, like cars (some will argue it's still a bad debt since it depreciates in value, but sometimes you have to get around) and property.

If you're actually using your CC as anything other than a more convenient debit card then you're doing it wrong.
 
Car loan,Study Loan,Cellphone,Petrol,Rent,Electricity,most of your money is gone long before you start spending on anything - let alone saving. Nowadays staying alone in the Metro and working can be a pricey affair,not surprising people rack up debts

And for those saying it's easy to get loans without credit history - try again. GF wanted to buy her first car,after 2 weeks of applying and getting the runaround from every bank and financers being declined I applied and got it the same day
 
RaptorSA said:
That's utter bull**** dude. I've never had issues getting loans before I even came close to having a credit history. Neither has anyone I know. As long as you prove you have income and you can list your expenses to prove you can cover the repayments you're in. Most don't even check that, especially Cellphone contracts.
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Some places they put in numbers into the computer and come back and tell you no because the computer said no. I know I was denied my cell phone contract. I was approved only after I showed them my history of my cash payments, and they went through the supervisor to approve. When I bought my car I was given 17% interest after the 3rd bank was approached. I was given R2000 credit when I applied for a credit card at ABSA, the smashingly beautiful clerk gave a nervous laugh when she told me what came back from the computer.

Having a credit history is important, you get punished paying cash. This is why what you say is bull****.
 
mkhan said:
Im not sure how I feel about this. At 20k, you can easily afford a GTI, but I guess then you lose the possibility of buying a house. So it's a personal choice really. I had the choice a year ago, house or car. I chose house...
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20k gross or after deductions? I can't imagine someone earning 20k gross and have about 16k left after deductions and decide to pay more than R6k a month (excluding insurance and petrol) on a depreciating asset such as a car.
 
Sly21C said:
20k gross or after deductions? I can't imagine someone earning 20k gross and have about 16k left after deductions and decide to pay more than R6k a month (excluding insurance and petrol) on a depreciating asset such as a car.
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New Golf 6 GTi (DSG) is R 4499pm....terms and conditions apply. The same goes for BMW, Audi, Merc. You can imagine a lot of people will "afford" cars now.

Most of our young graduates in training are driving A3, BMW 1-Series. The guys who are around 25yrs age are riding on C-Class, 3-Series (320i selling like hot cakes). This was unthinkable when I started working because:

- you needed a min 10% deposit to buy a car
- maximum allowable payment period was 54 months
- there were no residual offers. You were lucky to get 20%
- high interest rates
 
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dlk001 said:
New Golf 6 GTi (DSG) is R 4499pm....terms and conditions apply.
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^^^
This is why people get burnt especially when they cancel the expensive insurance on their shiny R300K+ vehicle and then prang it or someone steals it.
It only takes one or two such mistakes to set you back for life.
 
Vis1/0N said:
Some places they put in numbers into the computer and come back and tell you no because the computer said no. I know I was denied my cell phone contract. I was approved only after I showed them my history of my cash payments, and they went through the supervisor to approve. When I bought my car I was given 17% interest after the 3rd bank was approached. I was given R2000 credit when I applied for a credit card at ABSA, the smashingly beautiful clerk gave a nervous laugh when she told me what came back from the computer.
Having a credit history is important, you get punished paying cash. This is why what you say is bull****.
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:wtf:
Man that is weird.
I'm starting to wonder now why some of my loans were accepted so easily. Also, my GF earns utter peanuts and just started working again after a long hiatus (no credit history) and her relatively expensive Galaxy S3 contract was approved in minutes. Same with everyone else I know.
 
This is simple to reason. What is the first thing people buy when they land their first permanent job- lekker set of wheels.
 
Garson007 said:
Some people just look more dodge to the system than others. :p
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Think it's actually the opposite. They just wanted to get rid of me before I shed creepy looking long dude hair on their desks. Plus much of this "credit approval" usually has to happen in a Joburg mall somewhere.... and you DO NOT want to see my Mallface :D :twisted:
 
I fall into the category of people talked about in the article (mid 20s, have a university qualification, been working for a year or so) and I had serious doubts on whether to get myself a car (that new Merc A-class, grrr) or a flat. Image really does matter to young people, we want to show people we are succeeding by having the fancy new car and it really does work wonders with the ladies :P In the end, I don't understand how people can afford to purchase a new GTI, those things are not cheap even if you are earning around the 20k mark. Especially taking into account the price of fuel, a GTI would cost an arm and a leg to drive to work daily.

In the end, its all about status and image, and that costs money, lots of money!
 
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