With the Reserve Bank raising the repo interest rate to 7%, well above pre-Covid levels, the cost of credit for the average consumer is set to get much more expensive. File Image: IOL
By Jonathan Hurvitz
With the Reserve Bank raising the repo interest rate to 7%, well above pre-Covid levels, the cost of credit for the average consumer is set to get much more expensive.
This, along with inflation levels approaching 8%, means buying high value durable goods on cash or credit is fast going out of reach for South Africans.
With these mounting pressures on consumers, here are five steps to unlock value, flexibility and cashflow by getting the goods you want on subscription.
Check buying patterns
Take stock of how you typically buy high-value items for your home or business. Do you tend to whack big-ticket items like televisions, washing machines or fridges on your credit card? Do you use store cards or high-interest credit facilities? Most likely, your choice of product is limited by what you can shell out in cash or credit that can involve not only high interest rates, but stiff penalties if circumstances change and you’re not able to meet your payments.
Assess value
We have long been taught that ownership is the only way, but is it? For the financial burden you bear in acquiring these goods, why not enjoy the best in class without the need to own or owe on them. A smarter option for consumers is to subscribe. A month-to-month agreement gives you access and usage of the appliances and electronics you need for a flexibly monthly fee with full peace of mind – installation, maintenance, risk cover, and even the television licence are all built-in. You’re also not tied into a long-term, inescapable contract. You have the choice to cancel at any time, or even upgrade or downgrade your product to suit your circumstances and budget.
Assess cost
With the swift advancement of technology, along with the current high inflationary climate, durable goods are only set to get further out of reach. Paying in cash or entering an onerous credit agreement are sure-fire ways to worsen your financial standing . Either you are in a constant shortage of cash, or you are working every day to service debt, rather than investing.
Cut the fat
The days of hauling massive boxes from the supermarket are behind us. One thing the pandemic has revealed is the massive potential for e-commerce to deliver unmatched convenience across a daily expanding range of products and services. The administrative and cost burden of maintaining appliances and electronics, as well as adding these to existing risk policies, is best left to the professionals, leaving you to invest the time and money you save in more fulfilling activities.
Make the tough choices
Whether you are moving to a new house or looking to upgrade your appliances, your cash can be utilised in other areas.
Times have changed, and subscription works in every area of our lives, from health and wellness, to work, lifestyle and entertainment. Through our subscription service, our customers can live freely and enjoy the life they love, how they want and when they want, without any unnecessary burdens.
Jonathan Hurvitz is the Chief Executive Officer at Teljoy
BUSINESS REPORT