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The National Credit Act (NCA) was implemented in 2005 and replaced the older Usury Act and Credit Agreements Act. It was created with the intention of promoting more responsible credit usage and greater transparency between credit institutions and debtors.

Many view the NCA with trepidation and a little anger. It does indeed make it harder to be granted purchases on credit but it does so for very specific reasons.

To protect a debtor from unmanageable debt. By forcing to creditors to follow the procedure of a credit history check they are better able to determine whether you would be able to make the repayments and thus effectively manage your debts. So if you are denied credit you should be told the full reasons why and understand it was done with your financial credit health in mind.

Prevents underhanded credit marketing whereby you are automatically accorded an account and have to request to cancel it.

You have the right to full disclosure and as such have knowledge of all costs that may be incurred with the use of credit.

So although the NCA may appear to be limiting what you can get on credit it is actually fact encouraging responsible debt management through good credit health. This can be achieved through getting an accurate, regular credit report from CreditReports South Africa. By monitoring and maintaining a good credit history you can gain the full benefits of the National Credit Act while avoiding the unpleasantness of its repercussions.

The key to effectively managing your finances within the boundaries set by the law is having the correct knowledge to apply.