„short-term credit transactions,“ agreements of up to R8,000 that can be repaid within six months; Generally, these are microcredits. The maximum allowed rate is 5% per month or 60% per year. Section 89 lists a number of illegal credit contracts, including credit contracts that can only be amended in specific circumstances, including the reduction or increase of credit limits. Whereas the Credit Contracts Act previously excluded agreements in which the debtor became the owner of the property or re-established the ownership or use of the goods of the definition of „rental-sale,“ the amending law explicitly included these types of credit contracts in the definition. This means that the categories of credit contracts under the definition of „credit transaction,“ and thus the application of the law, have been extended to these types of transactions. „Unsecured credit transactions“ are agreements for which there is no guarantee on debt (such as loans or loans). The amount or time to repay is unlimited. Unsecured agreements over R8,000 and/or repayable agreements of more than six months fall into this category. The maximum interest rate is linked to the South African Reserve Bank `SARB` redemption rate ((return rate x 2.2-20% per annum) and is currently 39.8% per annum (based on the current rest of 9%). This maximum rate is almost twice the maximum allowed under the Usury Act, which applied until May 31, 2007 (20% per year). Furniture sales, for example, could now cost twice as much. The consumer can transfer the property subject to the credit contract at any time, whether the consumer is late or not.

This provision is the subject of an in-depth discussion above. The effect of opening and service charges on small loans is related to a misappropriation of the cost of credit away with interest and fees, so that interest rates decrease relative to these fees. This imbalance has the dangerous effect of concealing the real cost of consumer credit and misleading the consumer. Overall, the strength of the national credit regulator, the extensive powers of the National Consumer Court and the courts, the almost paternalistic tendency of lawmaker protection and the vast network of dispute settlement accounts for consumer legislation, which will have a huge impact on the huge credit industry in South Africa. [12] This document describes credit as a „double-edged sword“ since the power does not apply to large contracts such as mortgage bonds, due to poor levels of consumer education and knowledge of consumer rights due to a „significant power imbalance between consumers and credit providers“ and the inability to assert these rights through negotiation or legal action. When a consumer wants to pay a loan, they must first cancel the lender for a period of three months. When a mortgage is terminated, the consumer is responsible for cancelling bonds.