One of the most common questions people ask before entering debt review is: "What will happen to my credit card?" The answer is straightforward but important to understand fully. When you enter debt review in South Africa, your credit card account is frozen — you can no longer use it for purchases, online transactions, or cash withdrawals. The outstanding balance becomes part of your restructured repayment plan, typically at a significantly reduced interest rate. Here is a detailed explanation of how the process works.
Your Credit Card Is Frozen Immediately
The moment your debt counsellor notifies your credit providers that you have been placed under debt review, your credit card account is suspended. This means you cannot make any new purchases, tap-to-pay transactions, online payments, or cash advances using that card. The card is effectively deactivated, even though you still physically have it in your wallet.
This applies to every credit card you hold — whether it is a Visa, Mastercard, or American Express card issued by any South African bank including FNB, Standard Bank, Absa, Nedbank, or Capitec. All credit card accounts linked to your name are included.
The credit provider will close or suspend the credit facility on their side. Even if the physical card has not expired, it will be declined if you attempt to use it. Recurring debit orders or subscriptions linked to your credit card will also stop going through, so you need to switch those to a debit card or other payment method before entering debt review.
Key point: Your credit card is frozen during debt review. You cannot use it for any new purchases or transactions. The outstanding balance is restructured with a reduced interest rate as part of your debt review repayment plan.
Section 88(1) of the NCA — No New Credit
Section 88(1) of the National Credit Act (NCA) is the legal provision that governs what happens to your credit during debt review. It states clearly that a consumer who has been placed under debt review may not enter into any new credit agreement with any credit provider until a clearance certificate has been issued by their debt counsellor.
This means you cannot apply for a new credit card, increase your existing credit limit, or open any other form of credit account while you are under debt review. Credit providers are legally required to check your credit profile before approving any application, and the debt review flag will appear immediately, resulting in an automatic decline.
This restriction is not a punishment — it is a protection. The purpose of debt review is to help you become debt-free. Allowing you to take on additional credit while you are already over-indebted would defeat the purpose of the process entirely. Section 88 ensures that your financial recovery is not undermined by new debt.
How Your Credit Card Debt Is Restructured
The outstanding balance on your credit card at the time you apply for debt review is included in your restructured repayment plan. Your debt counsellor negotiates with the credit card provider on your behalf to achieve more favourable terms. Here is how the restructuring typically works:
- The outstanding balance is captured: The exact amount you owe on your credit card at the date of your debt review application is recorded. This becomes the principal amount to be repaid.
- Interest rate is negotiated down: Credit card interest rates in South Africa typically range from 17% to over 20% per year. Your debt counsellor negotiates this down significantly — often to between 0% and 5%. This reduction alone can save you thousands of rands over the repayment period.
- Monthly payment is based on affordability: Your debt counsellor conducts a thorough affordability assessment, looking at your income versus your essential living expenses. The monthly payment towards your credit card debt is set at an amount you can genuinely afford.
- No new charges or fees above the negotiated rate: Once the restructuring is in place, the credit card provider cannot add new charges, penalty fees, or interest above the agreed rate to your account. Your balance can only go down, not up.
- Repayment period may be extended: To make the monthly payments affordable, the repayment period may be extended. While this means you pay for longer, the drastically reduced interest rate means you often pay less in total than you would have under the original terms.
Important: Make sure all recurring subscriptions and debit orders linked to your credit card are moved to your debit card or bank account before entering debt review. Once the credit card is frozen, these payments will fail, which could result in service cancellations or penalty fees from those providers.
What About Store Cards?
Store cards — such as Woolworths, Edgars, Mr Price, Truworths, Foschini, and Game — are treated exactly the same as credit cards under debt review. A store card is a credit facility regulated by the National Credit Act, regardless of whether it carries a Visa or Mastercard logo or is a store-only card.
When you enter debt review, all your store cards are frozen. The outstanding balances are included in your restructured repayment plan, and interest rates are negotiated down just as they are for bank-issued credit cards. You cannot use any store card for purchases during debt review.
This includes store cards that offer a "budget" or "revolving credit" facility, as well as store accounts used for clothing, furniture, electronics, or any other purchases. If it involves credit, it is included in the debt review.
What About Debit Cards and Prepaid Cards?
This is an important distinction that many people find reassuring. Your debit card is NOT affected by debt review. A debit card is linked directly to your bank account and uses your own money — it is not a credit facility. When you swipe or tap your debit card, the money comes out of your available balance. Because no credit is involved, debit cards fall entirely outside the scope of the NCA and debt review.
Similarly, prepaid cards and virtual wallets are not affected. If you use a prepaid Visa or Mastercard that you load with your own funds, or a digital wallet like SnapScan linked to your bank account, these continue to work normally during debt review. You are spending your own money, not borrowing.
What Is Frozen vs What Still Works
| Payment Method | Type | Status During Debt Review | Reason |
|---|---|---|---|
| Bank credit card (Visa/Mastercard) | Credit facility | Frozen | Credit agreement — included in restructuring plan |
| Store card (Woolworths, Edgars, etc.) | Credit facility | Frozen | Credit agreement regulated by NCA — same as credit card |
| Overdraft facility | Credit facility | Frozen | Credit agreement — included in debt review |
| Debit card (linked to bank account) | Own funds | Works normally | Uses your own money — not a credit agreement |
| Prepaid Visa/Mastercard | Own funds | Works normally | Pre-loaded with your own money — no credit involved |
| Digital wallet (SnapScan, Zapper) | Own funds | Works normally | Linked to bank account — no credit involved |
| Cash | Own funds | Works normally | Physical currency — completely unaffected by debt review |
| EFT / bank transfer | Own funds | Works normally | Direct transfer from your bank account — no credit |
Can Creditors Still Charge Annual Fees?
Whether your credit card provider continues to charge an annual card fee during debt review depends on the specific restructuring agreement negotiated by your debt counsellor. In many cases, annual fees and service fees are waived or reduced as part of the negotiation. However, this is not guaranteed and varies by provider.
Your debt counsellor will address this during the negotiation phase. If annual fees are still being charged, they will form part of the total outstanding balance and be factored into your monthly repayment. The key principle is that the total amount you repay is governed by the court order or consent agreement — creditors cannot unilaterally add charges beyond what was agreed.
What About Rewards Points and Loyalty Programmes?
Unfortunately, rewards points, air miles, and loyalty programme benefits linked to your credit card may be forfeited when your account is frozen or closed during debt review. Each credit provider has its own terms and conditions regarding rewards during account suspension.
If you have a significant balance of rewards points, it is worth checking your card's terms and conditions before entering debt review. Some providers allow you to redeem outstanding points before the account is suspended — for example, converting them to shopping vouchers or statement credits. Ask your debt counsellor to advise on the best approach for your specific situation.
Tip: Before entering debt review, check if you can redeem any accumulated rewards points, air miles, or cashback balances on your credit cards. Once the accounts are frozen, you may lose access to these benefits permanently.
Getting a Credit Card After Debt Review
Once you have successfully completed debt review and your debt counsellor has issued your clearance certificate, the debt review flag is removed from your credit profile at all credit bureaus. At that point, you are legally free to apply for a new credit card.
However, your credit score will need time to recover, and lenders will be cautious. Here is a practical approach to getting a credit card again after debt review:
- Start with a secured credit card: A secured credit card requires a cash deposit that serves as your credit limit. Because the bank holds your deposit as security, these cards are easier to qualify for even with a lower credit score. Use it responsibly for 6 to 12 months to build a positive payment history.
- Apply for a card with a low limit: Do not apply for a high-limit credit card immediately. Start with the lowest limit available and demonstrate responsible usage by paying the full balance every month.
- Wait at least 6 months: Give your credit score time to improve after the debt review flag is removed. Applying too soon may result in declines, and each declined application creates a hard inquiry that further lowers your score.
- Use the card for small, planned purchases: Treat the credit card as a convenience tool, not a borrowing tool. Use it for budgeted expenses like fuel or groceries and pay the full balance by the due date every single month.
Tips for Managing Without a Credit Card During Debt Review
Living without a credit card may feel inconvenient at first, especially if you have relied on one for years. But many people discover that they manage perfectly well — and even prefer it. Here are practical strategies:
1. Switch to Your Debit Card for Everyday Purchases
Your debit card works everywhere a credit card does — in-store, online, tap-to-pay, and at petrol stations. The only difference is that the money comes directly from your bank account. This actually helps you stick to your budget because you can only spend what you have.
2. Use a Prepaid Card for Online Shopping
If you prefer not to use your debit card online, get a prepaid Visa or Mastercard from your bank. Load it with a specific amount before shopping. This limits your exposure to online fraud and prevents overspending. Most South African banks offer prepaid cards with no credit check required.
3. Move Subscriptions to Debit Order
Services like Netflix, Spotify, insurance, and gym memberships that were linked to your credit card need to be moved to a debit order from your bank account or paid via EFT. Do this before entering debt review to avoid disruption.
4. Build a Small Cash Buffer
Without a credit card as a safety net, it is wise to keep a small cash buffer in your bank account for unexpected expenses. Even R500 to R1,000 set aside can cover minor emergencies that you might previously have put on your credit card.
5. Plan Purchases in Advance
Credit cards encourage impulse buying because the money does not leave your account immediately. Without one, you naturally become more intentional about spending. Plan larger purchases, compare prices, and wait before buying. This habit alone can save you significant money each month.
6. Use SnapScan or Zapper for Convenience
Digital payment apps like SnapScan and Zapper link directly to your bank account (not credit). They offer the same convenience as tapping a credit card — scan a QR code and pay. Many restaurants, retailers, and even parking metres accept these payment methods.
The Bigger Picture: Credit Cards and Over-Indebtedness
Credit card debt is one of the most common forms of debt that leads people into financial difficulty. The combination of high interest rates (often above 20%), minimum payment traps, and the ease of spending money you do not have makes credit cards particularly dangerous for consumers who are already under financial pressure.
If you are currently struggling with credit card debt — making only minimum payments, using one card to pay off another, or relying on your credit card for basic living expenses — these are signs that you may be over-indebted. Debt review can break this cycle by freezing the debt, reducing the interest rate, and giving you a structured, affordable path to becoming debt-free.
For a full explanation of how the debt review process works, read our guide on what is debt review. If you want to understand what happens to your credit score, see debt review and your credit score. And for a complete picture of what life looks like once your debts are paid off, read life after debt review.
Frequently Asked Questions
Can I still use my credit card after applying for debt review?
No. Once you are placed under debt review, your credit card account is frozen immediately. You cannot make any new purchases, cash withdrawals, or balance transfers. The outstanding balance at the time of your application is included in your debt review restructuring plan and repaid at a reduced interest rate.
What happens to my store cards (Woolworths, Edgars, etc.) during debt review?
Store cards are treated exactly the same as credit cards under debt review. They are credit facilities regulated by the National Credit Act, so they are frozen and included in your restructuring plan. You cannot use your store cards for purchases while under debt review.
Can I open a new credit card while under debt review?
No. Section 88(1) of the National Credit Act prohibits you from entering into any new credit agreement while under debt review. No bank or credit provider may legally issue you a new credit card until your debt counsellor has issued a clearance certificate confirming all debts have been paid.
Will my credit card interest rate be reduced during debt review?
Yes. Your debt counsellor negotiates reduced interest rates with all your creditors, including credit card providers. Credit card interest rates are typically reduced from 20% or more down to single digits, often between 0% and 5%. This significantly reduces the total amount you pay over the life of the debt.
Can I get a credit card after debt review is completed?
Yes. Once your debt counsellor issues your clearance certificate and the debt review flag is removed from your credit profile, you are free to apply for a new credit card. It is advisable to start with a secured credit card or a card with a low limit to rebuild your credit score gradually.
