Coordinated credit card moves from CBRT and BRSA: Limit and restructuring changes

The CBRT's Communiqué on Amendments to the Communiqué on Maximum Interest Rates to be Applied in Credit Card Transactions was published in the Official Gazette, and the BRSA's board decision on the matter was published on its website.

Accordingly, the BRSA has introduced the opportunity for restructuring of up to 60 months for those who cannot pay their individual credit card and consumer loan debts.

Those who cannot pay the minimum amount of their periodic debt on individual credit cards will be able to restructure their existing credit card debt balances for up to 60 months. The installment amount for each month will be added to the minimum payment amount for that month. The credit card limit at the relevant bank cannot be increased until at least half of the restructured credit card debt is paid.

The CBRT has also capped the maximum interest rate to be used in the restructuring of individual credit cards at the reference rate of 3.11 percent.

Consumer loans, on the other hand, can be restructured for up to 60 months without additional credit if principal and interest payments are delayed by more than 30 days. The borrower must apply for restructuring within 1 year.

CHANGES MADE TO MINIMUM PAYMENT RATE BASED ON LIMIT

The BRSA has also made changes to the minimum payment rate for credit cards.

The threshold amount for the minimum payment rate, which is 20 percent of the periodic debt, has been increased from 25 thousand liras to 50 thousand liras. While the minimum payment rate for credit cards with a limit of 50 thousand liras and below will be 20 percent of the periodic debt, it will be applied as 40 percent for those with a limit of 50 thousand liras and above.

In line with the BRSA's steps, the CBRT has differentiated the maximum contractual interest rates applied to individual credit cards based on the credit card periodic debt, linked to the reference rate. In this context, the rates to be determined will be announced on October 24 and will enter into force on November 1.

If the reference rate remains the same, the maximum contractual interest rates will be 3.50 percent for credit cards with a periodic debt of less than 25 thousand liras, 4.25 percent for credit cards with a debt between 25 thousand and 150 thousand liras, and 4.75 percent for credit cards with a debt of over 150 thousand liras.

The maximum contractual interest rate for cash withdrawals/usage via credit cards has been maintained at the 5 percent level.

News Source: AA