Debt without credit? How to avoid unwanted financial problems

You plan your expenses meticulously and you save. You don't borrow money from your friends. You regularly pay off your loans or have never taken any. And yet… you still have debts! How is this possible?

Unfortunately, there are ways you can accidentally fall into debt. For example: failing to pay a fine on time, forgetting a small instalment for a purchase, or a fraudster stealing your data and using it to secure credit.

Here are three things to remember when it comes to unplanned debts and their consequences…

1) Forgotten tickets and penalties

Forgetting to pay a fine or penalty can land you in longer-term financial difficulty. If you do incur a penalty, make sure you follow the appeals process or pay the fine promptly. This will avoid the costs escalating and risk of being taken to court for payment. If you ignore notifications about unpaid fines, costs will mount and could affect your credit rating.

2) Practice safe spending online

Online security is essential if you are to avoid becoming a victim of cybercrime. Internet phishing scams attempt to steal logins, passwords and credit card numbers by infecting a computer with malware or persuading you to reveal information.

Fraudsters may pose as courier companies, auction portals, and mobile operators. They also hack profiles of friends on social media and impersonate people we trust to ask for money or help in signing a purchase or loan agreement. Cyber ​​criminals then use stolen personal data to take out loans or credit.

Develop good online security habits and pay special attention to how you shop online. Although it is convenient, don’t add or save your payment cards to your accounts in online stores or applications. When you receive a code from your bank to confirm an online payment (electronic transfer or mobile transaction), check carefully whether all the data is correct - whether the amount is correct and whether the money is to go to the right recipient. This stops scammers intercepting such text messages and changing them to extort money.

Be careful to read terms and conditions before signing up for payment plans for goods or services online, and make use of cooling off and cancellation periods if you change your mind.

3) Cancel unused accounts and subscriptions

Make sure you close any unused bank accounts and cancel unwanted subscriptions. When you sign up for a free trial, charging automatically begins at the end of the trial period. It is easy to forget and rack up bills for services you don’t want or need. It’s generally a good idea to make sure all contracts are properly concluded when you’ve finished with them.