Incidental Credit

For someone who is working on a tight budget (which, to be honest, is most of us), unforeseen expenses such as medical bills or sudden demands for payment of arrears on contracts (such as club memberships and cell-phone contracts) mean that we have to try and find extra money that sometimes just isn’t there. When one is already battling to make ends meet and keep up with all of the other payments that have to be made, that extra demand is like a brick being thrown to a drowning person.
According to the National Credit Act, if a creditor (i) charges any fees or interest because an account was not paid by a specific date or (ii) quoted a higher price if an account was paid after a certain date, that account automatically becomes an “Incidental Credit Agreement”. This means that, for anyone who does feel that their debt repayment instalments are unaffordable and decides to apply for Debt Review to relieve them of this burden, accounts such as those mentioned above are eligible for inclusion. The only condition is that 20 business days must have passed since the creditor charged a fee or interest for late payment, or since the higher price for the later payment became applicable. Should the accounts be placed under Debt Review, the creditors cannot proceed with legal action, and the law requires them to negotiate a reduced instalment with the Debt Counsellor.
This is yet another way in which the National Credit Act meets its stated aim of relieving consumers who are over-indebted. Thankfully, it aims to throw a drowning person a rope, rather than a brick!