South African banks closing the credit card taps

South African lenders are tightening access to credit cards for new entrants despite a rising demand for these revolving credit products.

This is being done by lowering the credit limits on new accounts, which have dropped by nearly 20% on average compared to 2024.

This was revealed in TransUnion’s latest Quarterly Overview of Consumer Credit Trends for the second quarter of 2025.

This report revealed that South Africa’s credit card market continued its upward trajectory in the second quarter, as active accounts rose to 7.4 million, up 3.7% compared to the second quarter of 2024.

The report explained that this signals ongoing consumer engagement with revolving credit products and their reliance on credit cards to manage everyday expenses.

TransUnion found that the average balance per account edged up to R25,200 in the second quarter of 2025, a 3.6% year-on-year increase, “suggesting consumers continue to rely on credit cards to manage everyday expenses amid persistent economic pressures”. 

It further found that the average credit line per account rose more modestly to R41,800, up 2.9% year-on-year, indicating a cautious expansion in available credit. 

However, the average credit limit on newly originated accounts dropped to R22,800, representing a 19.5% decline year-on-year.

TransUnion said this highlights a more conservative stance as lenders tighten access for new entrants despite rising demand.

Origination volumes surged 36.5% to 266,100 accounts, underscoring the enduring relevance of credit cards as a flexible financial tool in a climate where liquidity remains a priority. 

“However, the drop in average new credit lines suggests lenders are balancing growth with risk mitigation,” the report said.

It further found that delinquency trends showed mixed results, with balance-level delinquency up slightly to 18.1% while both account-level and consumer-level delinquency rates declined to 12.1% and 16.4%, respectively. 

This suggests that while there was a marginal increase in overdue balances and that some consumers are accumulating larger balances. 

However, it also shows that many are also continuing to manage their accounts actively enough to avoid falling behind. 

“This reflects strategic credit use and repayment discipline, though the underlying payment behaviour warrants closer analysis,” the report said.

The table below shows the findings of TransUnion’s second quarter report related to credit cards.

Consumers under severe pressure

While inflation is lower and interest rates have come down, South African consumers face severe cost-of-living pressures.

With continued low economic growth and price pressures on South African businesses, the outlook for consumers in the country remains constrained.

Discovery Bank and Visa’s latest SpendTrend report showed that consumer spending is coming under renewed pressure in South Africa despite declining inflation.

Discovery Bank CEO Hylton Kallner explained earlier this year that average spending per card is flat year-on-year and trended downwards throughout 2024. 

The growth in spending was below the headline inflation, with consumers spending less in real terms.

This can also be seen in consumer confidence levels, with the FNB/BER Consumer Confidence Index for South Africa slipping to -13 in the third quarter of 2025.

This is down from -10 in the previous period, and shows that the index stays well below the historical average of -1, indicating a greater degree of pessimism.

TransUnion’s second-quarter Consumer Pulse Survey found that South African consumers remained cautiously optimistic. In particular, their income expectations improved. 

However, it also found that many households continued to adjust their financial behaviours by prioritising debt repayments, reducing discretionary spending and exploring alternative credit options like ‘buy now, pay later’.

“As South Africa moves through the second half of 2025, lenders and policymakers must remain agile,” TransUnion said. 

“Balancing growth with resilience, refining segmentation strategies and enhancing early risk detection will be key to supporting consumer financial health and maintaining long-term portfolio stability.”