How to optimise your credit management

27 JUNE 2024

Financial literacy is crucial in tough times. With rising food and fuel costs, South Africans need effective financial tools. RCS, in partnership with the Welltec Group, are stepping up by offering their customers & employees free access to personalised credit reports and financial wellness resources. Glenda Eager, RCS Product and Marketing Executive, emphasises the importance of effective financial management. She notes that better financial education results in consumers having more effective financial skills, resulting in them planning for long-term financial health.

Glenda Eager, RCS Product and Marketing Executive

“In a survey conducted by the Financial Sector Conduct Authority in partnership with the Human Sciences Research Council, it was concluded that only around 51% of South Africans are financially literate. As a business, RCS is fully committed to promoting and stimulating greater levels of financial inclusion. Our partnership with Welltec helps us to address this need in a practical way that any South African, from any background, can use and understand,” she says.

1. Keeping score

The first step to better credit management is to keep track of your credit score. Knowing your credit score helps you understand your credit health.

This is where the partnership between RCS and the Welltec Group’s Credit Gateway platform comes in. Using the platform, you can obtain a free credit report and credit score in under five minutes. All that’s needed is a valid South African identity number. It’s important to highlight that requesting the report will not have any negative effect on your credit rating.

The platform is easy to use and can be accessed through a link that is provided on the communication RCS is sending to our customers or via a link on the website. The financial wellness platform will assist customers with the necessary tools to make credit more manageable.

2. Staying on track

“Maintaining a positive credit history requires diligent planning and self-discipline. Customers are encouraged to find out what some of the best practices are when it comes to keeping their credit scores in check. The Credit Gateway platform also provides users with access to some of this advice, as well as tips and tools to improve their credit score,” says Eager.

Some good credit management habits include:

  • Create a budget – list your income & expenses and try to find areas to save.
  • Pay on time - Set automatic debit orders or reminders for credit repayment, to avoid late payments and potential fees.
  • Limit the number of credit applications you submit - to avoid multiple inquiries that could temporarily lower your credit score.
  • Make more than the minimum payment - pay as much as you can afford on your credit products each month to reduce interest charges and pay off debt faster.
  • A debt repayment schedule can also go a long way in keeping track of your most pressing debts.

3. Decoding the lingo

An important part of becoming financially literate involves developing an understanding of some of the most used industry terms and jargon. Knowing what these terms mean can help individuals navigate the complexities of borrowing and managing credit effectively:

  • Credit Score: A number that represents your creditworthiness, based on your credit history. Lenders use this score to decide if they will give you credit and at what interest rate.
  • Credit Report: A detailed report of your credit history, including loans, account cards, credit cards, and payment history. Lenders review this report to assess your financial behaviour.
  • Interest Rate: The cost of borrowing money, usually expressed as a percentage.
  • Higher interest rates mean you'll pay more over time.
  • Credit Limit: The maximum amount you can borrow
  • Minimum Payment: The smallest amount you must pay each month on your account or credit card.
  • Balance: The total amount owed on an account, credit card or loan.

Empowering Financial Wellness with RCS and Welltec

"Access to credit in South Africa isn't just about facilitating transactions; it's about fostering economic empowerment and resilience," concludes Gert Jonck, CEO of Welltec Group.  "From fueling entrepreneurship to providing a safety net during emergencies, credit plays a vital role in driving both individual well-being and national development, especially within a strained economy.

The financial wellness platform offers RCS customers a suite of comprehensive tools and tailored financial solutions, thus empowering individuals to transition from financial distress towards wealth-building.”