Credit card debt has increased by 40 percent since June

While the new economic administration, seeking to curb exorbitant inflation and the cost of living, has implemented successive interest rate hikes, citizens whose purchasing power has hit rock bottom continue to borrow to survive.

Credit card debt has increased by 40 percent since June.

In line with its goals to reduce inflation, the new economic administration aimed to decrease domestic consumption by raising interest rates from 8.5 percent to 40 percent in 5 months. Accordingly, loan and credit card interest rates have also risen one after another. The maximum contractual interest rate applied to the remaining balance when only the minimum amount of credit card debt is paid was 1.36 percent in June (23 percent annual compound interest), while today it has risen to 3.66 percent (75 percent annual compound interest).

On the other hand, the average personal loan interest rate, which was 41.52 percent in June, rose to 61.50 percent as of December 8, while the vehicle loan interest rate rose from 34.02 percent to 36.76 percent, and the mortgage interest rate rose from 23.98 percent to 42.58 percent.

TOTAL DEBT EXCEEDED 2.5 TRILLION

According to the report by Sözcü; while the interest rate hike was expected to reduce spending through borrowing, the borrowing of citizens whose purchasing power has eroded has not slowed down. According to the comparison of individual consumer loans and individual credit card debts before the changes in economic policies were reflected to the citizens, the total debt of citizens has increased by 19.14 percent since June, rising by 410.7 billion TL to exceed 2.5 trillion TL as of December 8.

During the period in question, personal loans increased by 10.71 percent to 951.7 billion TL, and vehicle loans increased by 10.64 percent to 91.4 billion TL.

Mortgage loans, on the other hand, have almost come to a standstill and remained at 439.9 billion TL with an increase of 0.23 percent during the same period.

A 40.41 percent increase was observed in individual credit card debts over the 6-month period, exceeding 1 trillion lira to reach 1 trillion 73 billion lira.

News Source: 12punto