The Director of Research and consulting for TransUnion, Carmen Williams, took the Business Hour through the findings of the latest consumer credit reporting agency’s latest global payment hierarchy study, which reveals that the coronavirus pandemic has altered the credit payment priorities of South Africans. 

It appears that for years South Africans prioritised their car payments over their home loan payments, due to the unreliability of the country’s transport system and the need for citizens to have a car just to get by, especially in large cities. Williams says remote working during the coronavirus pandemic has led to a change in that dynamic, with citizens now paying off their home loans as opposed to their car repayments. 

“Home is now an office, school,” says Williams, explaining that the multi-functionalism of one’s home is forcing South Africans to make this big payment first. This isn’t the only area in which there is a noticeable change, Williams says the appeal of credit cards over personal loans has led to a change in priorities in that regard as well. Williams says the change isn’t necessarily driven by the assumption that credit cards have a higher interest rate and therefore need to be paid off first, it’s more a case of the rise in online shopping, which has upped the usage of credit cards.

Williams acknowledges that while the study focuses on credit payment behaviours, South Africans continue to be heavily indebted.

The most important advice she gives is that one must contact their financial services provider should they find it challenging to pay their debt. It’s only then that your provider can look through relief options that are available to you or reach some kind of payment agreement.