New regulations coming for credit cards
The economic management, which is implementing monetary tightening to combat inflation, plans to introduce new regulations for credit cards.
12punto
The increase in credit card spending shows that consumer demand remains strong despite the tightening of monetary policy. Emphasizing its determination to fight inflation, the Central Bank announced that new regulations regarding credit cards will be implemented.
CBRT Governor Fatih Karahan stated, "We have some ideas regarding credit cards, and we are working to resolve these. We will share them with the public when we are ready."
It is not yet clear what kind of regulations will be introduced for credit cards. Banks Association of Turkey President Alpaslan Çakar previously stated in a statement that there could be changes regarding issues such as interest rates, the number of installments, or spending limits.
FORMULAS ON THE TABLE
Credit card limits are an important factor determined by banks that affect customers' spending capacity. However, experts warn that banks keeping credit card limits too high could trigger inflation. Credit card limits should be adjusted more appropriately based on criteria such as customers' payment performance, income-expenditure balance, and credit scores. Otherwise, the increase in spending made with credit cards could create demand pressure and drive up prices. Therefore, keeping credit card limits at reasonable levels will be in the interest of both banks and customers.
The increase in credit card spending is seen as a risk that could disrupt economic balances. For this reason, the BRSA (BDDK) placing a restriction on credit card installments is on the agenda. This practice could cover spending, especially in the services sector and abroad. Installment restrictions are considered a measure that could be taken to reduce credit card debt and encourage savings.
MINIMUM PAYMENT AMOUNT
New regulations concerning credit card users could be implemented soon. One of these is increasing the minimum payment amount. Currently, at least 20 percent of the periodic debt must be paid for credit cards under 25 thousand liras, and at least 40 percent for those over 25 thousand liras. These rates were last updated in June 2022.
The Central Bank has not changed credit card interest rates since November. Although it increased the policy rate by 250 basis points in January, it kept the reference interest rates applied to credit cards constant. Although demands for credit card regulations are increasing, the path to be followed has not yet been finalized.