Citizens are drowning in debt! 'Credit card limit' becomes the new step in the fight against inflation
While battling high inflation, economic managers continue to pursue a tight economic policy. As year-end inflation expectations have begun to rise, a new tightening measure has been triggered. Accordingly, the credit card limits of millions will be reduced in the new year. Here are the details...
The bill for high inflation continues to be paid by the citizens. The Central Bank of the Republic of Turkey had raised its year-end inflation forecast from 38 percent to 44 percent. Economic management is preparing a new measure to reduce inflation, which is eroding the money in citizens' pockets day by day.
With the 2024 year-end target for the fight against inflation, which has been ongoing for a year and a half, set at 44 percent, a new solution has been sought. Accordingly, one of the new restrictions to be introduced for credit card holders to suppress demand-pull inflation will be a comprehensive limit regulation.
In recent months, Treasury and Finance Minister Mehmet Şimşek announced in a speech that a new team would be formed between the Risk Center of the Banks Association of Turkey (TBB) and the Social Security Institution (SGK).
PRELIMINARY WORK COMPLETED
According to a report by Sözcü, the preliminary work for the team to be formed has reached the final stage, and with this implementation, banks will be able to view their customers' current income information from the SGK database in real-time.
RETROACTIVE LIMIT ADJUSTMENTS MAY BE MADE
While the regulation plans to make credit card limits proportional to monthly income, it is stated that banks may carry out retroactive limit adjustments. According to the legislation to be implemented in the new period, the BRSA (BDDK) stated in an instruction sent to banks that customers' credit card limits should be between 2 and 4 times their monthly income.
TURKEY IS IN A DEBT TRAP
In current practice, many banks offer their customers limits of up to 15 to 20 times their monthly earnings, which makes Turkey one of the unhealthiest countries in the world in terms of credit card limits and monthly income amounts. This situation, which causes millions of citizens to quickly fall into a debt trap in an inflationary environment, has risen to historic levels in recent years.
According to the latest report by the BRSA, it has emerged that one in every two credit card users in Turkey has a card limit of over 100 thousand liras.
News Source: 12punto
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