Five smart strategies to manage debt and interest rates

South Africans are learning to live and thrive in a financially uncertain world. The latest TransUnion Consumer Pulse Study (Q2 2025) shows that while 39% of households expect they may miss at least one bill or loan payment, many are actively reshaping their habits to build financial resilience. Encouragingly, 31% of consumers are paying down debt faster, 24% are boosting emergency savings, and 37% plan to increase their retirement or investment contributions.

These trends suggest that South Africans are not only reacting to pressure, but they are also taking proactive steps to protect their financial futures. Ayesha Hatea, director of research and consulting at TransUnion South Africa, shares some tips and tricks to help you manage debt and interest rates more effectively.

1. Pay off high-interest debt first: Credit cards and personal loans often come with the highest interest rates, so when choosing which debt to pay off first, look at clearing those high-interest loans. "In a high-interest environment, every rand you pay off today saves you from paying more interest tomorrow," says Hatea. List your debts and focus on paying off the ones with the highest rates first, while keeping up with minimum payments on the rest.

2. Be strategic about borrowing: Access to credit remains crucial — 92% of South Africans believe it's important for achieving their goals. Yet only 36% intend to apply for credit in the next year, reflecting caution amid high borrowing costs and income uncertainty. If you do borrow, make it purposeful. The study found that demand is strongest for credit cards (30%), personal loans (28%), and Buy Now, Pay Later services (25%) — but remember that these are all unsecured products that can quickly become costly if not managed well. Compare interest rates, fees, and repayment terms before taking on new credit.

3. Build a safety net: Nearly one in four consumers (24%) increased contributions to emergency savings or stokvels. In addition, 37% plan to grow their retirement or investment savings in the coming months. Start with a modest, consistent contribution to an emergency fund. Even R200 a month can create a buffer that reduces reliance on credit when life throws you curveballs.

4. Strengthen your financial awareness: The study shows that 70% of South Africans check their credit reports at least quarterly, with Gen Z and Millennials leading the way. Those who actively monitor their credit tend to feel more confident and have a better understanding of their overall financial commitments. Check your credit report regularly, track your score, and make sure all information is accurate. Awareness is power when it comes to negotiating better credit terms.

5. Protect yourself against digital fraud: Fraud remains a real risk — 58% of South Africans said they were targeted by scams, and 13% fell victim. Younger generations are more likely to adopt safeguards like multi-factor authentication, but 21% of consumers took no action at all. Use strong, unique passwords, enable two-factor authentication, and monitor your accounts for unusual activity. Protecting your identity is just as important as protecting your money.

The bottom line: The TransUnion Consumer Pulse Study shows that while many households remain under pressure, South Africans are becoming more selective in how they spend, strategic in how they borrow, and vigilant in how they protect themselves. "Resilience comes from balance: focus on responsible spending and borrowing, reduce costly or unsustainable debt, and build savings to protect against future shocks," Ayesha concludes. Credits: TransUnion South Africa.