Furniture and appliance store credit is regulated credit, and the total cost of buying a household item on account is frequently far higher than the price on the ticket. The difference sits in interest, insurance and added products, and it is disclosed — if you ask.
This page covers the qualifying criteria and then how to work out what a store account purchase actually costs, which is the calculation that changes decisions.
Eligibility Requirements at a Glance
Typical qualifying criteria for store credit.
- Be 18 years or older with a valid South African ID
- Have a regular, verifiable income paid into a bank account in your own name
- Be permanently employed, or show consistent self-employed income
- Hold a bank account able to carry a debit order
- Not be under debt review, sequestration or administration
- Satisfy the affordability assessment required by law
- Pass the credit bureau check, which determines the limit offered
- Proof of residence, where the retailer requires it
Income and Affordability Requirements
The National Credit Act 34 of 2005 requires an affordability assessment before credit is granted: the provider must verify gross income, subtract statutory deductions, subtract the prescribed minimum living expenses and subtract existing debt repayments. Lending without that assessment is reckless lending and is prohibited.
Ask for the total amount payable before you sign. Not the monthly instalment — the total. Multiply the instalment by the number of months and compare that against the cash price. On a two- or three-year account the difference is often a substantial proportion of the price again.
The instalment is the number the store shows you, because it is the smallest and most comfortable one. It is not the price.
Ask what is included in the instalment. Typically the item price, the initiation fee, the monthly service fee, interest, credit life insurance, and often an optional extended warranty or a delivery and installation charge. Each is separately priceable and some are optional.
Credit life insurance is generally compulsory and you may substitute an equivalent policy of your own under the National Credit Act, which can be cheaper. Ask what the policy must cover.
Extended warranties and add-ons are usually optional. Ask which are compulsory and which are not, and decline the ones you do not want. The Consumer Protection Act 68 of 2008 gives you an implied warranty of quality on goods, so an extended warranty is buying something on top of a right you already have.
Credit and Financial Requirements
Request the section 92 pre-agreement quotation. The National Credit Act entitles you to it before signing, and the quoted terms are valid for five business days. That window lets you take the quotation home, do the arithmetic away from the store, and compare against another retailer or against saving for the item.
Compare against the alternatives honestly. Saving for three months and paying cash costs nothing. A layby arrangement typically costs nothing beyond the price. A personal loan from a bank may carry a lower rate than store credit. Second-hand is a legitimate option for many household items.
The account appears on your credit record and the available limit counts as exposure in future affordability assessments — so an old store account you never use reduces what you can borrow for a car or a home. Close accounts you do not use.
Missed payments escalate quickly. Default interest, collection costs and a bureau listing follow, and the listing outlasts the debt. Contact the retailer before missing a payment rather than after.
Repossession is not automatic. Prescribed procedures under the National Credit Act must be followed before goods can be repossessed, including a section 129 notice giving you the opportunity to bring the account up to date or refer it to a debt counsellor. Do not surrender goods to anyone who has not followed that process.
Never give a store your card PIN, banking password or a one-time PIN. No legitimate retailer needs any of them.
Documents and Verification Required
The application document set.
- South African ID document, smart ID card or valid passport with a permit
- Latest payslip, or the latest three where income varies
- Latest three months’ bank statements, or electronic retrieval consent
- Proof of residence, where the provider requires it
- Exact banking details for payout and the debit order mandate
- A cellphone you control, for one-time PIN verification
How to Apply and Improve Approval Readiness
Apply in store or online with income and identity verification. Approval and the limit follow the affordability assessment and credit check.
Before signing, do one thing: take the quotation outside, multiply the instalment by the term, and compare that number to the cash price and to what saving for three months would cost. It takes two minutes and it is the most useful thing you can do in the transaction.
- Ask for the total amount payable, not the instalment
- Request the section 92 quotation — valid for five business days
- Multiply the instalment by the term and compare to the cash price
- Ask which added products are compulsory and decline the rest
- Ask whether you may substitute a cheaper credit life policy
- Remember the Consumer Protection Act already gives an implied warranty
- Compare against saving, layby, a bank loan and second-hand
- Close old store accounts — unused limits count against you
- Contact the retailer before missing a payment, not after
- Know that repossession requires prescribed procedures to be followed
Frequently Asked Questions
What should I ask before signing?
The total amount payable over the full term, not the monthly instalment. Multiply the instalment by the number of months and compare it to the cash price.
Are the added products compulsory?
Credit life insurance generally is, though you may substitute an equivalent policy. Extended warranties and similar add-ons are usually optional — ask which is which.
Does a store account affect other credit?
Yes. It appears on your credit record and the available limit counts as exposure, reducing what you can borrow for a car or a home. Close accounts you do not use.
Can goods be repossessed if I miss payments?
Not automatically. The National Credit Act prescribes procedures, including a section 129 notice. Do not surrender goods to anyone who has not followed them.
Credit criteria, interest rates, fee caps and insurance terms are set by the retailer and its credit provider within National Credit Act limits and are revised. Confirm current requirements and the full cost of credit with the retailer before signing.