More than R2.4 billion worth of transactions are expected to take place in a single day on Black Friday.
If you're preparing to take advantage of Black Friday deals, think again. Consumers are advised to be cautious of "never before seen" deals offered by retailers, and especially taking credit for items they may not need.
Building upon the launch of an advertising campaign, featuring Vusi Thembekwayo, South Africans are asked to rethink credit as part of responsibly realising their dreams.
Capitec Bank advises South Africans to carefully consider Black Friday and to ensure they use credit for the right reasons. To help consumers, the bank has put together a list of myths and tips to help you during the retail frenzy called Black Friday.
Myth #1: You can't beat Black Friday prices
False. The festive season is around the corner and retailers have a month left to lure consumers into their shops with attractive deals. On Black Friday, stores have so-called doorbusters – those are the big discount deals being advertised to get you into the shop – but the discounts on the majority of the products are much smaller.
Myth #2: It's a once-off opportunity for consumers
False. If you think Black Friday was planned for your benefit, think again. It's intended to get you to spend money. Retailers have not reduced prices to be kind to you, rather it's a chance to drive sales and increase profit before year-end. They want to sell their goods and it won't be at a loss.
Myth#3: Everyone is doing it
False. The hottest trend is minimalism. It's all about decluttering and moving towards simplicity. Buying things won't make you happy. The more you own, the more worries you have. Think experiences rather than stuff.
Top 5 tips for Black Friday:
Tip #1: Buy smart
Don't let Black Friday become an excuse to buy things you don't really need and spend money you don't have. Think it through and be smart. Ask yourself: "will this purchase help me to live better and realise my dreams?" Electronics, clothing and flashy accessories quickly become old, but a new computer for your business or a vehicle to transport your kids to school stand the test of time. It's all about long-term utility over short-term happiness.
Tip #2: Credit can be useful
If you spot a deal on an item you really need, and that will help you live better in the future, credit can be a useful tool. When buying things on credit make sure that the value of the item will outlive the repayment plan. Most importantly, look at all the costs of taking credit, including initiation fees, monthly fees and any insurance payments required. Avoid store credit as interest rates are usually very high versus the Capitec credit card that offers interest rates as low as 10%. On the Capitec website, you can check what you could qualify for. Make sure you have all the other documentation you need to apply.
Tip #3: Pay off what you owe first
If you're still paying off a student loan, your car and have existing debt on credit cards, Black Friday is probably something to avoid. While most of South Africa's credit-active consumers are in “in good standing”, if you fall behind on loan payments it could compromise your credit rating. Before considering more shopping, make paying off what you owe a priority.
Tip #4: Make a list, check it thrice
Consider what you need, rather than what you want. List your expenses according to your needs, not your wants. This will help you to cut out non-essential spending. It's the difference between buying a fridge rather than five kilograms of the latest flavour of frozen desserts.
Tip#5: Sales days attract thieves
The increase in people drawing cash means there's a higher risk of cash theft and card swapping at ATMs. Rather use your card for purchases. With a Capitec debt card, you pay zero fees and don't have to carry large amounts of cash.
* This article was published in partnership with Capitec.