A Festive Season on the Brink: Record Debt Haunts South African Households

The promise of a joyful festive season is colliding with a harsh financial reality for millions of South Africans. New data paints a grim picture: households are approaching the most expensive time of the year carrying the heaviest debt load seen in nearly a decade.

The Q3 2025 DebtBusters Debt Index reveals a nation under severe financial water, with many families having already exhausted their safety nets long before the December spending pressures even begin.

An Unsustainable Burden

The statistics are alarming. Of those seeking debt counselling in the third quarter, a staggering 95% relied on a personal loan, while 22% were regularly using their overdraftthe highest levels ever recorded.

According to Benay Sager, Executive Head of DebtBusters, these individuals are now using an unsustainable 70% of their take-home pay just to service debt. “This is the highest level recorded in the last eight years,” Sager confirmed.

The breakdown is even more distressing. Those taking home R35,000 a month are spending 78% of their income on debt repayments. For the most vulnerable, earning R5,000 or less, a crushing 92% of their meager income goes straight to creditors.

The Dangerous Crutch of Short-Term Credit

The core of the problem is a fundamental imbalance. Over the past nine years, income growth has simply not kept pace with the rising cost of living. To bridge the gap, consumers are increasingly turning to short-term, high-interest credit.

“Consumers are using short-term unsecured credit and personal loans to make up the shortfall,” Sager explained. This includes payday loans (57%) and mounting vehicle debt, creating a dangerous cycle that is difficult to escape.

Demand for online debt management has surged by 47% year-on-year, a clear signal of widespread financial distress.

A Perfect Storm in December

This precarious situation sets the stage for a “full-blown crisis” during the festive season, warns Debt Rescue CEO Neil Roets. He notes that many households are entering this period with “almost no buffer at all.”

“The interest rate cuts have helped at the margins, but not nearly enough to turn the tide,” Roets said. The enormous social pressure to spend on gifts, travel, and food, combined with back-to-school costs in January, can easily push already strained families over the edge.

For those already using credit to cover basic monthly expenses, the additional burden of festive spending is a risk they can ill afford. This festive season, the greatest gift for many may simply be making it to January without falling deeper into a financial abyss.