How Does the National Credit Act Benefit You?

First signed in 2005, it is legislation brought in to assist the credit market of South Africa.
The act was created to regulate South African lending with safe and responsible practices. It
includes the understanding that banking services should be more accessible to all South
Africans. The National Credit Act is regulated by the National Credit Regulator.

Why is the NCA necessary?

In the years before 2005, the credit market was a tricky environment to navigate. It was
poorly regulated, and as such, it left many consumers in danger of financial difficulty.

Benefits of the NCA

In a nutshell, it simplifies and standardises credit agreements. This means it can help you
manage your credit correctly.

It can also assist as follows:

  •  The NCA protects illiterate consumers. Legislation states that consumers must be
    assisted through the process of applying for credit. With the NCA, an illiterate
    consumer will no longer be exploited by irresponsible borrowing.
  • A credit provider may not discriminate unfairly against you. They can’t deny your
    application for credit based on information that is unrelated. If a credit provider
    refuses your application they have to tell you why they did so.
  • The NCA insists on clear and understandable marketing communication. As a
    consumer applying for credit, you must receive a detailed written quote, valid for 5
    business days. This provides you with the time to make quote comparisons from
    different credit providers.
  • It also provides for debt re-organisation should a consumer be over-indebted.

Additionally, the National Consumer Tribunal (NCT) was established by the Act. This exists to arbitrate and resolve issues regarding consumers’ complaints. If a consumer has a dispute with a credit provider, this can be settled at the NCT.

While it does seem difficult to understand, the NCA aims to simplify many of the grey areas surrounding the
South African credit market. The NCA helps to enhance and provide control for a better and more responsible credit market. The main aim of the NCA is to create an accessible and affordable credit market, one with the right mechanisms in place to protect consumers against unscrupulous lending and over-indebtedness.

Speak to One Debt today for more details.

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