Debt can feel deeply personal. Like you’ve messed up, or fallen behind. But that’s not what debt usually looks like in real life.
In a recent Francly Speaking conversation, Franc CEO and co-founder Dr Thomas Brennan sat down with Benay Sager, Executive Head of DebtBusters – South Africa’s leading debt management company – to unpack why so many South Africans end up overwhelmed by debt, and what it actually takes to get out of it.
One of the clearest insights from their conversation was that debt problems rarely begin with one reckless decision. More often, debt builds slowly through rising costs, life shocks, easy access to credit, and the pressure of trying to keep everything going at once.
Their conversation covers why this is, how to avoid it, and how to get out of a debt trap if you find yourself in one.
South Africa’s debt problem is bigger than it looks
Benay shared that South Africa’s recorded consumer debt pile has grown from about R1.7 trillion in 2013 to R2.7 trillion at the end of 2025, while the credit-active population has only grown slightly over the same period. He also pointed out that plenty of debt does not even appear in the credit bureaus, including money owed to schools, municipalities and other providers.
In other words, the pressure many households feel is not imagined. It’s real, and it often stretches beyond what lenders officially see. This pressure also shows up in DebtBusters’ latest Money-Stress Tracker, which found that 70% of respondents experienced money stress in 2025, while 63% indicated 30% or more of their after-tax income goes to debt repayments.
That also explains why debt can feel so lonely. Someone may still be paying their accounts, still going to work, still looking fine from the outside, while privately running out of room.
First, know the difference between good debt and bad debt
One of the most useful frameworks from the conversation was Benay’s take on good versus bad debt.
“In my opinion, any amount of money you borrow is good debt if you are going to use it to make more money,” he says.
That could include:
- A study loan to improve your earning potential.
- Getting financing on a practical vehicle that helps you get to better work opportunities.
- Taking out a home loan to buy a property that should hold or grow value over time.
But he drew a clear line too: “If you are borrowing purely to repay previous debt, that is not a good use of money. That’s bad debt.” That is where many debt traps begin. Not with a house or a degree, but by using new credit to patch over old pressure. He also adds another important distinction:
“If you are using it for consumption purposes, it’s probably not the best use of money.”
In other words, debt that helps you build future income or value can be useful. Debt taken on to fund short-term consumption, especially things that lose value quickly or don’t improve your financial position, or to pay off old debt, is where trouble often starts.
What debt should you take on if you want to build a credit score?
A credit score can affect whether you qualify for a home loan, vehicle finance, a personal loan or even a cellphone contract. It’s shaped by things like whether you pay on time, how much credit you use, and how long you have had credit accounts open.
That does not mean you need lots of debt. It means you need manageable, well-used credit.
For most people, a healthy approach looks like:
- Taking on only one or two forms of credit you can comfortably repay.
- Paying every instalment on time.
- Keeping balances low, especially on revolving debt like credit cards.
- Avoiding unnecessary applications for new credit.
What should you be careful with? Store cards, personal loans and credit cards used for everyday spending can help build your credit score if managed well, but they can also become expensive very quickly if you carry balances or rely on minimum payments.
The warning signs that debt is becoming a problem
Benay’s examples here are practical and probably uncomfortably familiar.
He said you may be overstretched if you cannot cover unexpected costs, if your debit orders start bouncing, if you are avoiding calls from debt collectors, or if your money is basically gone a day or two after payday. He also put it plainly:
“You instinctively know when you start to lose sleep over the financial stuff.”
Another practical rule he shared is that your combined debt repayments should ideally stay below 30% of your take-home pay. “My golden rule is do not spend more than 30% of your take-home pay combined on debt repayments, period.”
That number matters because, as he explained, most people need roughly two-thirds of their income just to cover food, transport, children, school, and other living expenses.
So if your debt repayments are crowding out your ability to live, save or recover from a surprise expense, that is not something to ignore.
How to start getting out of bad debt
Benay suggested looking at three areas:
- Income. Can you increase what’s coming in, even temporarily? A side income will not solve everything, but it can create breathing room.
- Expenses. Can you cut, downgrade, negotiate, or change spending patterns? He mentioned that many people overpay for essentials or miss out on retailer rewards and cashback programmes that could help stretch their budgets further.
- Debt repayments. This is the part people often treat as fixed, even when it may not be. Benay said many consumers never consider that repayments can sometimes be restructured depending on their circumstances.
He also shared a simple debt repayment framework that many people will find useful: “If you want your mind to win, pick the one with the highest interest rates. If you want your heart to win, attack the one with the lowest balance.”
That is a helpful reminder that getting out of debt is not only maths. It is behaviour too.
If you are already seriously behind, debt review may be worth exploring. Bear in mind that once you are under debt review, you cannot take on additional credit until the process is completed.
Yes, you still need an emergency fund
This can sound impossible when you are already under pressure, but both Thomas and Benay make a strong case for it.
Thomas notes that Franc encourages people to build an emergency fund of one to three months’ worth of salary in an accessible account, because too many people end up borrowing just to deal with life when something goes wrong.
Benay agreed, but also made it feel doable: “Depending on what your situation is, have a bit of a buffer.”
That’s the key. You do not need to start with a perfect emergency fund. You need to start with something – a small buffer can prevent a car repair, medical cost or family emergency from becoming new debt.
Don’t wait until it gets serious
Benay’s closing message was probably the most important of the whole discussion: “The earlier you try to tackle [your debt], the more options you will have. The longer you wait, the fewer your options become.”
That is the real takeaway. Debt does not have to define you. But it does need your attention.
Start by listing every debt, interest rate and monthly repayment. Check what percentage of your take-home pay goes towards repayments. Stop adding new debt where you can. Pay on time. Build even a small emergency buffer. And if things already feel too heavy, ask for help early.
For more help, Franc has useful reads on building and improving your credit score and building an emergency fund, while DebtBusters has practical guides on debt management, credit scores and debt counselling, and how to negotiate with your creditors.
