Local bank watchdog plans to control credit card use

Local bank watchdog plans to control credit card use

ISTANBUL - Reuters
Local bank watchdog plans to control credit card use

AP photo

Turkey’s banking watchdog BDDK announced Aug. 16 new measures to control credit card spending and to enable more controlled use of credit cards.

Under the new measures, overdrafts on deposit accounts and loans on credit cards will be included under the broader category of consumer loans, preventing banks from charging higher interest rates for the services.

The BDDK said debt related to credit cards had increased to 46 percent of total non-performing consumer loans by June, although it gave no comparative figures.

Credit card and personal loan debt has reached alarming levels in Turkey as the number of people with card debt and loan debt surpassed 680,000 as of June, while the amount was around 822,000 in all of 2012, according to the latest report by the Turkish Banks Association (TBB).

The BDDK also set a limit for credit cards issued for consumers with an income of 1,000 Turkish Liras ($520) a month or less and said lenders would now have to monitor income levels regularly.

The banking industry will send its views on the planned measures by a deadline of Aug. 26, after which the BDDK will make any necessary amendments before the changes are put into effect.

The move comes weeks after Prime Minister Recep Tayyip Erdoğan publicly slammed banks for collecting large sums of money from the “poor.” “Those credit cards: Don’t have them. If everybody spends as much as they [banks] want, they would not even be able to earn that income. They could never be satiated,” he said July 16.