Yet, just as more people are reaching for their cards or applying for loans, the banks are quietly tightening their grip.

According to the latest TransUnion Industry Insights Report for the second quarter of 2025, lenders are reducing credit limits, approving fewer large loans, and becoming increasingly cautious about whom they lend to. It’s a squeeze that’s leaving struggling households with fewer financial lifelines.

“Consumers, particularly younger cohorts, are increasingly relying on credit to manage affordability constraints, while lenders are recalibrating their approaches to growth and risk,” TransUnion said in the report.

The cautious stance comes even as South Africa’s economy shows faint signs of recovery. GDP grew 0.8% in the second quarter, while inflation eased to 3.6%, its lowest point in years. The Reserve Bank responded with a rate cut to 7.0% in July. But the biggest obstacle remains the jobs crisis: unemployment is stuck at 32.9%, leaving many South Africans dependent on debt to survive.

Banks cut limits as credit demand soars

The number of active credit cards climbed to 7.4 million, with balances rising by 7.5% year-on-year to about $9.8 billion. On average, each cardholder now owes $1,320.

Yet, new cardholders are getting smaller limits, down 19.5% to around $1,195, as banks “balance growth with risk mitigation.”

While more people are swiping, most are still keeping up with repayments. Delinquency rates dropped, even as overdue balances rose slightly to 18.1%.

For many, this discipline comes not from comfort but from fear, missing a payment could mean losing one of their few remaining safety nets.

Non-bank lenders fill gap, but at a cost

Personal loans paint a similar picture: fewer people are taking them out, but those who do are borrowing more, often to consolidate debt or cover unexpected expenses.

For ordinary South Africans, credit has become a survival tool rather than a convenience. And as banks close the taps, the question is no longer whether people can borrow, but how long they can keep balancing debt and daily life.