Credit card debt is rising, citizens are in a difficult situation
Since the beginning of the year, credit card debt has increased by 191.8 percent, and approximately 900 thousand people have fallen into default. While deposits in banks are decreasing, credit debts continue to rise. The debt crisis is deepening.
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Deposits in banks decreased by 334 billion liras in the week of September 27-October 4, falling to 17.61 trillion liras, while the loan volume expanded by 28 billion liras to reach 14.95 trillion liras. The loan-to-deposit ratio also rose from 83.2 percent to 84.9 percent.
While deposits have increased by 18.6 percent since the beginning of the year, the growth in the loan stock was 28.6 percent. The high level of interest rates and high inflation make it difficult for large segments of society, whose income has not increased sufficiently, to repay their debts. Citizens are increasingly entering a new debt crisis.
Citizens' individual loan and credit card debts increased by 13.4 billion liras in the week of September 27 – October 4, reaching 3 trillion 575 billion liras. In the week in question, the balance of individual loans increased by 8.1 billion liras to 1 trillion 901 billion liras, and the credit card debt balance increased by 5.3 billion liras to 1 trillion 674 billion liras. Consumers' debts to banks have increased by 846 billion liras, or approximately 31.1 percent, compared to the end of 2023.
During this period, the balance of individual loans recorded an increase of 344 billion liras, and the credit card debt balance recorded an increase of 504 billion liras. Since the beginning of the year, there has been an increase of 191.8 percent in non-performing credit card debts and 57.7 percent in non-performing individual loan debts.
In parallel with the rising debts, the number of citizens who cannot pay their debts to banks on time and are therefore subject to legal proceedings is also increasing rapidly. According to the Risk Center's data, in the January-August period of this year, 736 thousand 513 people were placed under legal proceedings by banks because they could not pay their individual loan debts on time, and 899 thousand 47 people were placed under legal proceedings because they could not pay their credit card debts on time. When those who were placed under legal proceedings for both credit card and consumer loan debts are counted as a single person, a total of 1 million 213 thousand 55 people were placed under legal proceedings because they could not pay their debts to banks on time. Meanwhile, the number of citizens who were placed under legal proceedings by banks and other financial institutions in previous years, but whose debt still continues, reached 3 million 847 thousand at the end of August.