CREDIT CARD SPENDING CALLS FOR INTERVENTION DUE TO CURRENT ACCOUNT DEFICIT!

As the regulations, regarding limiting instalment payments via credit cards, are expected to go into effect before the new year, it is reported that some 325 thousand 179 people failed to pay their credit card debts in the first six months of this year. The experts state that the current account deficits cause for restraints in individual credits. While Turkey’s current account deficit totalled up to 3 billion 281 million USD in September, it reached 59 billion 135 million on a yearly scale.

Halit Soydan, Lecturer at IUE Department of Economics, and Former Managing Director of Yapı Kredi and Garanti Banks, stated his opinions about Banking Regulation and Supervision Agency (BDDK) wanting to make the regulation on limiting credits and credit cards effective in 15 days. “Credits cards tend to cause people to spend more than they have, which ends up in undesirable outcomes,” indicated Soydan and said that people couldn’t live without credit cards. Soydan stated the following:

“Credit cards-can’t live with them, can’t live without them. Sometimes we pay our debts with them. In other words, we roll over debts. And sometimes we use it for not so urgent expenses. Central Bank’s figures, regarding the number of people who delay personal loans or credit card payments, are remarkable. Based on these figures, the number of people who failed to pay their credit card debts reached up to 277 thousand 333 in 2009, 222 thousand 360 in 2010, 238 thousand 645 in 2011, 453 thousand 656 in 2012, and 325 thousand 179 between January-May of this year.”

Non-performing loans are much better compared to the ‘West’  

Soydan stated that the total amount of the credits given by the banks was 972 billion TL and the amount of credit card dues and personal loans totalled up to 434 billion TL. Soydan said, “The amount of consumer loans to be liquidated is 5.2 billion TL, and credit cards is 4.8 billion TL. This is a red alert. In reality, non-performing loans are low keyed compared to western economies. However, financial stability policies are popular everywhere. Our current account deficit clearly caused Ankara to come up with new solutions. This is the very reason of intervention in personal loans.”