South Africans Retreat From Credit as Global Tariffs and Domestic Rates Fuel Economic Uncertainty

South Africans are turning their backs on borrowing, despite over R1.2 trillion in consumer credit circulating, and many are still eligible. But today brings a new twist: US President Donald Trump’s 30% tariffs officially come into effect, rattling global markets and sending shockwaves through emerging economies like ours.

“With GDP growth forecasts stuck at a meagre 1%, borrowing now feels more like a risk than a relief,” says Sebastien Alexanderson, Head of National Debt Advisors. “The consumers we speak to are cutting back on everything non-essential. There’s just no appetite to take on credit for big purchases. People are choosing groceries and transport over furniture and finance.”

Read the full article below.

A spokesperson from National Debt Advisors is available to expand on the below talking points:

• Why aren’t South Africans borrowing, even though credit is technically available?
• How are high real interest rates making borrowing less attractive for consumers?
• What global and domestic pressures, including Trump’s new tariffs, are worsening the local economic environment?
• What smart financial steps can consumers take during uncertain economic times?

Tariffs, Tight Credit & High Rates, A Perfect Storm for Consumers

01 August 2025: As we sink firmly into the second half of the year, South African consumers are facing a tough reality: rising living costs, high borrowing rates, and now, global trade pressures that threaten to make things worse.

Trump’s 30% tariffs, announced earlier this year and taking effect today, are aimed at imports from several nations, including those supplying components to South Africa’s manufacturing and automotive sectors. For a country already grappling with six straight months of manufacturing contraction, this is a double blow.

“Tariffs aren’t just a US problem,” Alexanderson explains. “They drive up the cost of imported goods, weaken our export competitiveness, and create a ripple effect that hurts jobs and business investment locally. When businesses feel the pinch, consumers inevitably do too, through higher prices and fewer opportunities.”

Against the backdrop of economist Professor Brian Kantor’s mid-year report card, which highlights weak overall demand and credit activity, despite a slight uptick in household spending, Alexanderson says these new tariffs add another layer of uncertainty for already cautious South African households.

“The consumers we speak to are cutting back on everything non-essential,” Alexanderson says. “There’s just no appetite to take on credit for big purchases. People are choosing groceries and transport over furniture and finance.”

“With the repo rate at 7.25% and inflation sitting at 2.8%, real interest rates exceed 4%, leaving borrowers to pay more for credit while their purchasing power continues to erode,” he adds.

While interest rate cuts were widely anticipated later this year, Alexanderson warns that even if they happen, the global uncertainty, now compounded by Trump’s tariffs, could offset any local relief.

Advice for South African Consumers at this time:

• Avoid rushing into debt just because interest rates might be falling. Understand your budget and repayment commitments thoroughly.
• Reassess your financial goals. If borrowing isn’t necessary, focus on building savings or reducing existing debt.
• Stay informed about economic changes, like new tariffs, that could affect interest rates, credit availability, and job security.
• Seek professional help if debt becomes overwhelming. Organisations like National Debt Advisors offer guidance on manageable, legal solutions.

“This isn’t the time to take unnecessary risks,” Alexanderson concludes. “It’s the time to plan smartly and stay steady. The fundamentals of the economy can improve, but until they do, South Africans need to protect their financial health.”

ENDS

About National Debt Advisors National Debt Advisors is South Africa’s leading debt counselling company, dedicated to helping South Africans struggling with their finances become debt-free in under 60 months. NDA negotiates with creditors for reduced monthly interest rates and extended terms, consolidating all debt repayments into one lower monthly instalment. This protects consumers from harassment by creditors, secures their assets against repossession, and leaves them with more money to live on. NDA is committed to helping South Africans gain their financial freedom.

Enquiries Omega Ngema This email address is being protected from spambots. You need JavaScript enabled to view it. 061 420 5079