Unsecured Credit Cards in South Africa: An Ethical Perspective

Abstract: In recent years much attention has been given to the alarming increase in the household debt burden in South Africa. The two main remedial efforts, consumer education and prevention of reckless lending, have failed to arrest the trend. Over 40% of the credit active customers in South Africa stand in default in an economy that is struggling. This paper looks at the potential for, as well as the possibility of, ethical self regulation by store card marketers as a viable solution. An ethical analysis shows there is a limited understanding by companies and law makers. Focus group and interviews indicated that customers do have a high ethical awareness; but they are unaware, for the most part, of the powerful mechanisms that drive predatory financing. However, the status quo appears untenable and there exists a compelling case for an ethical dialogue for bringing about the requisite transformation for all stakeholders.

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Authors: Ashutosh Shrivastava, Perry Haan