The DTI and the Reserve Bank are trying to find a way of setting maximum interest rates in terms of the Usury Act which will take into account your interests, the interests of the banks and of furniture traders.
In the past, the maximum rates were determined according to a formula based on the prime rate. Had the formula been applied, Usury Act Registrar, Alistair Ruiters, says maximum interest rates would have been increased to 35 percent for credit over R6 000. Instead, the DTI decided to set the maximum rate at 32 percent while working with the Banking Council on a new formula based on costs to financiers, including risk. The aim, says Ruiters, is to develop a more transparent approach that will ensure that you and financiers understand the reasons for changes in maximum finance charge rates.
The banking sector has promised to make recommendations to assist you in dealing with interest rate increases, such as helping you to restructure your debt and rescheduling your loans to ease your repayments. They have committed themselves to provide help lines and help desks to consumers.