The National Credit Act (NCA) was signed into law by the President on 15 March 2005, and governs the assessment, application and maintenance of credit granted by a credit provider to a consumer within the Republic of South Africa. 

The NCA has updated areas of the law that were contained in the Credit Agreements Act, the Usury Act and other legislation that were cumbersome, ineffective and subject to abuse or obsolete. 

What is the purpose of the NCA? 

Some of the main purposes of this Act are to: 

• Promote and advance the social and economic welfare of South Africans;
• Promote a fair, non-discriminatory, controlled, competent, sustainable, responsible, efficient and accessible credit marketplace;
• Simplify and standardise the manner in which information is disclosed in credit agreements;
• To assist over-indebted consumers to restrict their debt;
• To establish the National Consumer Tribunal to adjudicate matters relating to the Act. 

The NCA protects a consumer who enters into a credit agreement with a credit provider. For example, a credit agreement can take the form of a credit card, overdraft, store card, personal loan and so on. 

The NCA applies to all credit agreements effective or entered into within South Africa, between consumers and credit providers that are independent from each other (dealing at arm’s length). 

The National Credit Act is aimed at regulating the consumer credit market, principally by improving access to credit for those previously excluded. Many South Africans are financially illiterate, and incur credit without fully comprehending the impact thereof. 

At the end of the day, the National Credit Act gives Consumers the right to apply for financial management and debt counselling assistance if he or she is unable to pay their debts. 

For debt counselling or assistance with cancelling contracts, please contact our offices for an appointment.