A new era for credit cards has officially begun!

Economist Muhammet Bayram stated, "Restructuring debts is a positive practice to allow citizens to take a breath and protect their purchasing power somewhat before the interest rates, which are expected to fall as of the beginning of the year, take effect."

There has been an increase in the number of people falling into legal follow-up due to card debts for some time.

In relation to this, the BRSA (BDDK) had also implemented new measures.

Accordingly, the opportunity to restructure credit and card debts with a maturity of up to 60 months was introduced.

INTEREST RATES WILL VARY ACCORDING TO STATEMENT BALANCE

According to the report in Milliyet, another regulation made by the BRSA came into effect as of November 1. Accordingly, maximum contractual (shopping) interest rates on credit cards will vary according to the statement balance. Those who spend less and pay the minimum amount of their card debt will pay lower interest on their carried-over debt. In other words, with the new regulation, those with less debt will also pay lower interest.

With the regulation, three spending limits were determined: under 25,000 liras, between 25,000 and 150,000 liras, and over 150,000 liras. Interest rates will also change according to these 3 spending limits.

GRADUAL INTEREST PERIOD

Providing evaluations on the subject, Sworn-in Certified Public Accountant and Economist Muhammet Bayram used the following expressions: “A new regulation has been introduced for credit cards and consumer loans. An opportunity to close statement balances has been provided by offering up to 60 months of installment options for those who cannot pay their loans and credit cards. Under normal conditions, restructuring of credit cards and consumer loans could not be done for up to 60 months. In fact, if you wanted to take out a new loan, its maturity varied between 12 and 24 months. Thus, we can say that the citizen has been able to take a breath by ensuring the liquidation of accumulated debt.

"IT CAN BE CONSIDERED AN EXPANSIONARY POLICY"

Even though policy interest rates have not fallen, interest rates on credit card debts will be tiered starting from the reference rate of 3.11 percent. Thus, the opportunity to pay off debts with more affordable financing will be offered. Offering such an opportunity before the policy interest rate, which is expected to fall as of the beginning of the year, can be considered an expansionary policy.

HERE ARE THE INTEREST RATES TO BE APPLIED ACCORDING TO CARD STATEMENT BALANCE

Previously, a monthly contractual interest rate of 4.25 percent and a late interest rate of 4.55 percent were applied for all cards. In the new situation, the interest rates valid from November 1 were to be determined according to the reference rate announced on October 24. The Central Bank announced the reference rate as 3.11 percent on October 24.

In this case, as of today, the interest rates to be applied according to the card statement balance will be as follows:

If the statement balance is under 25,000 liras, the maximum contractual interest rate will be 3.50 percent, and the maximum late interest rate will be 3.80 percent.

If the statement balance is between 25,000 liras and 150,000 liras, the maximum contractual interest rate will be 4.25 percent, and the maximum late interest rate will be 4.55 percent.

If the statement balance exceeds 150,000 liras, the maximum contractual interest rate will be 4.75 percent, and the maximum late interest rate will be 5.05 percent.

For corporate credit cards, regardless of what the statement balance is, a 4.75 percent contractual interest rate and a 5.05 percent late interest rate will be applied.

If the statement balance exceeds 150,000 liras, the maximum contractual interest rate will be 4.75 percent, and the maximum late interest rate will be 5.05 percent.

For corporate credit cards, regardless of what the statement balance is, a 4.75 percent contractual interest rate and a 5.05 percent late interest rate will be applied.

Interest rates for cash withdrawals from credit cards and overdraft accounts (KMH) have not changed. The maximum contractual interest rate remained fixed at 5 percent, and the maximum late interest rate remained at 5.30 percent.

WHY DID THE INTEREST APPLIED TO CREDIT CARD AND OVERDRAFT CASH WITHDRAWALS NOT FALL?

Despite the gradual application of interest regarding credit card debt restructuring and consumer loan restructuring, the interest rate to be applied to cash withdrawals from credit cards and overdraft accounts did not change. The main reason for this is to withdraw excess money from the market and ensure less spending in order to curb total demand with the continuation of tight monetary policy.

THE PURPOSE OF THE NEW REGULATION! 'BEFORE THE INTEREST RATES THAT WILL FALL AS OF THE BEGINNING OF THE YEAR...'

The regulation is a practice that supports the real sector and the citizen, especially in periods when tight monetary policy is applied and there is a liquidity crunch. Restructuring debts so that citizens can take a breath and their purchasing power is somewhat protected before the interest rates that will fall as of the beginning of the year is a very positive practice. I think it is a practice that will slightly reduce inflationary pressure. By restructuring these debts, individuals will now be able to plan their spending according to their own budgets and will pay off their debts gradually. Individuals will tend to spend less, and this will have an inflation-reducing effect.”

News Source: 12punto