Credit Card Balances Set New Records Despite Tightening

Turkey’s aggressive monetary tightening and the BRSA’s macroprudential measures have failed to dampen public appetite for credit card spending. Latest financial data reveals a striking shift in the lending landscape, as individual credit card balances have skyrocketed, outpacing traditional commercial loans and narrowing the gap with total consumer credit.

Breaking the 2.9 Trillion Lira Barrier

According to data from the Banking Regulation and Supervision Agency (BRSA) for the week of February 13, the total volume of individual credit card debt has reached a historic high of 2.91 trillion TL. This surge highlights a growing reliance on plastic as a primary financing tool amidst high inflation. For the first time, credit card debt has officially overtaken installment-based commercial loans, which currently stand at 2.61 trillion TL.

The New Engine of Personal Borrowing

Credit cards have become the “locomotive” of individual debt in Turkey. The 2.91 trillion TL balance is now breathing down the neck of the 3.02 trillion TL total consumer credit category, which includes personal, housing, and vehicle loans combined. Within the realm of TL-denominated lending, the only sector still larger than credit cards is SME loans, bolstered by more flexible growth limits at 5.2 trillion TL.

Tiered Interest Rates and Limit Restrictions

To maintain financial stability, the Central Bank and BRSA have implemented a gradual interest rate system based on the amount of debt. Currently, the maximum contractual interest rates are structured as follows:

While the BRSA recently announced new measures to reduce unused high limits on cards, banks have been granted a three-month transition period. This window of adjustment is cited as a key reason why card balances continue to climb despite the overarching contractionary policy.