Credit utilization rate rises for credit cards with the lowest limits

According to data from the Banks Association of Turkey Risk Center and analysis by the Central Bank of the Republic of Turkey (TCMB), the increase in per-capita debt on individual credit cards is continuing, albeit at a slower pace.

According to the analysis in the Financial Stability Report, credit utilization rates are increasing for cards with lower limits. The number of active individual credit card users and the per-capita debt amount continue to rise.

Following the rise in interest rates seen in consumer loans, it is observed that households are turning toward credit card usage.

According to the analysis, limit updates made following income increases are affecting credit card usage capacities. While the credit utilization rate has declined for high-limit cards, occupancy showed a limited increase for cards with limits between 25,000 and 100,000 TL. For credit cards with limits of 25,000 TL and below, it was observed that the credit utilization rate continued to increase.

While the amount of debt left to accrue interest on credit cards is increasing, the ratio of this amount to the total credit card debt has remained below historical averages.

The ratio of debts left to accrue interest to the total card balance for cards where the minimum payment or more is made was 12.6 percent, while the ratio of debts left in arrears for cards where less than the minimum payment is made was recorded at 8.1 percent.

The ratio of debt in arrears to the total individual credit card balance remained at approximately 20 percent, which is below its historical average.