Pick n Pay has joined Woolworths and other stores who offer its customers the option of purchasing groceries on credit.
Richard van Rensburg deputy CEO if Pick n Pay says the store accounts have been designed to exclude hidden fees that exacerbate the cost of credit and charge the lowest monthly fee of R10.
The new store card will allow qualifying Smart Shopper customers to purchase Pick n Pay goods on credit and if they settle their account in full within 55 days, no interest is charged.
“The decision by Pick n Pay to sell food on credit in their supermarkets is going to come back and haunt them because there is going to be a massive demand for this product and hugely debt-strapped consumers are going to default on these loans on a scale not seen before,” Neil Roets, CEO of debt counselling firm Debt Rescue told The Money Web.
“We are in the midst of an exceptionally difficult economic cycle where the price of everything is skyrocketing with salaries and wages in many cases remaining static. If consumers have reached the point of desperation that they had to buy food on credit that means that they are already at the end of their tether and in my view should not qualify for yet more credit,” he said.