Pick n Pay’s groceries on credit scheme slammed

Debt counsellors have strongly condemned a recent trend by retailers to offer consumers the option of buying their groceries on credit.

Debt counsellors have strongly condemned a recent trend by retailers to offer consumers the option of buying their groceries on credit.

Pick n Pay, the latest store to join others like Woolworths in offering qualifying customers the option of buying groceries on credit. Pick n Pay allows qualifying customers the option to buy groceries worth up to R40 000 on credit and 55 days in which to pay it off.

There is a monthly fee of R10, and interest of close to 21 per cent per year if they don't pay it off in time.

Debt counsellors have slammed the offering as irresponsible as consumers are already over indebted.

"It’s quite irresponsible for a big retailer to do something like that and to make credit available to consumers to buy food because it’s sending the wrong message its telling people that it is okay to borrow money to buy food, if you find yourself in this situation you need help," Debt Rescue's Neil Roets said.

Debt counsellors also pointed out that buying food on credit is a sign that consumers are struggling to manage their finances and are not financially literate. They say that more than half of credit active consumers are at least three months behind with debt payments.

They have also warned that the problem will be exacerbated by providing consumers with more credit.

Pick n Pay responded to the criticism by saying that it would use its Smart Shopper card programme to determine which customers will be offered the credit option.

It also said that the option would not be offered to social grant recipients who are unable to afford the debt.

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