What is the National Credit Act

You might have heard people speaking of the National Credit Act but have no idea what it
actually is. Like many people, you assume it is to do with finance and you tend to ignore what
you are hearing. However, knowledge is power, and learning more about the NCA and how it
can protect you is well worth the time.

Credit can be a double-edged sword. Used wisely, it can help consumers build a good credit
record. Unfortunately, credit also allows people to spend money they don’t actually have. This
can be in the form of loans, store cards, and credit cards.

The National Credit Act (NCA) was introduced “to promote and advance the social and
the economic welfare of South Africans, promote a fair, transparent, competitive, sustainable,
responsible, efficient, effective, and accessible credit market and industry, and to protect
Consumers.” This may sound rather involved but basically, it aims to simplify the many grey
areas surrounding the credit market.

Other reasons why it is in place are to promote responsible credit granting and use, as well as
prohibit reckless credit granting. One that is worth noting is that it can provide for debt re-
organisation in case of over-indebtedness. This is called debt review. It has assisted thousands
of South Africans out of the debt trap by restructuring payment plans for the person to become
debt free.

In addition, the NCA protects Consumer Rights. These include:

  • To apply for credit
  • To be protected against discrimination in the granting of credit
  • To be informed why credit has not been granted, should you ask
  • To receive a free copy of your credit agreement
  • To receive a credit agreement in plain and simple language
  • To have your personal and financial information treated confidential
  • To understand all fees, costs, interest rates, the total instalment and any other details
  • To say no to increases on your credit limit
  • To decide whether or not you want to be informed about products or services via telephone, SMS, mail, or e-mail campaigns
  • To apply for debt counselling should you be overwhelmed by debt

The NCA is an important legislation that offers protection to all South Africans. It aims to
protect people from unfair credit practices, and make certain that they are treated fairly by
any credit provider.

Need assistance with debt review? Speak to a consultant at One Debt today.