Running Account Credit Agreement Template for South Africa

A Running Account Credit Agreement is your legal framework for establishing ongoing credit relationships in South Africa. This document creates a revolving credit facility that allows you to offer consumers access to credit within predetermined limits, enabling multiple purchases and repayments over time. Whether you're operating a retail store, financial institution, or any business extending credit to customers, this agreement ensures your credit arrangements comply with South African law while protecting both your interests and consumer rights.

When do you need this document?

You need a Running Account Credit Agreement when establishing any form of revolving credit facility in South Africa. This includes store credit accounts where customers can make purchases up to a credit limit and pay over time, credit card facilities offered by banks or retailers, and flexible payment arrangements for ongoing business relationships. The agreement is essential for fuel card programs, wholesale credit arrangements between suppliers and retailers, and any situation where you want to provide customers with ongoing access to credit rather than single-transaction loans. E-commerce businesses offering "buy now, pay later" services and retailers providing loyalty program credit also require this document to legally structure their credit offerings.

Key legal considerations

Your Running Account Credit Agreement must include comprehensive pre-agreement disclosure statements as mandated by the National Credit Act, covering the principal debt amount, interest rates, fees, and total cost of credit. You must specify the credit limit clearly and outline how interest is calculated, ensuring compliance with prescribed interest rate caps. The agreement should detail repayment terms, default procedures, and your rights regarding debt collection, while incorporating consumer protection provisions that prevent unfair practices. Privacy clauses must comply with the Protection of Personal Information Act, particularly regarding how you collect, use, and share customer data. You must also include clear termination clauses, dispute resolution procedures, and statements about the consumer's right to withdraw from the agreement within the cooling-off period.

Legal requirements in South Africa

South African law requires your agreement to comply with the National Credit Act 34 of 2005, which mandates specific disclosure requirements, interest rate limitations, and consumer protection measures. You must be registered as a credit provider with the National Credit Regulator if your outstanding credit exceeds prescribed thresholds. The agreement must include mandatory pre-agreement statements detailing all costs, risks, and consumer rights in plain language that consumers can understand. You're required to conduct affordability assessments before extending credit and maintain detailed records of all credit decisions. The Consumer Protection Act 68 of 2008 also applies, requiring fair dealing and prohibiting unconscionable conduct. Additionally, you must comply with FICA requirements for customer identification and verification, particularly for credit limits above specified amounts, and ensure your debt collection practices align with the Debt Collectors Act if you engage third-party collectors.