Credit card and overdraft account expenditures, which the Central Bank, the economy management and the banking sector frequently draw attention to, literally exploded in all provinces last year.
According to the Banking Regulation and Supervision Agency’s (BDDK) Fintürk data, the increase in personal credit cards and overdraft accounts at least doubled in the provinces, while the share of these two expenditure items in total personal loans exceeded 50 percent.
This represents a total growth of 16.5 percentage points compared to 2022. In some provinces, credit card and overdraft account expenditures alone accounted for almost 65 percent of personal loan debts.
Policy rate hike not reflected
BDDK Fintürk announced the banking sector 2023 data in the provinces. The data revealed that individual customers have achieved a very rapid growth in overdraft and credit card expenditures. In the period until the May elections in 2023, when a low interest rate policy was implemented, interest rates on credit cards and overdraft accounts were well below the interest rates on consumer loans. After June 2023, overdraft account and credit card interest rates also increased with the increases in the policy rate by the new Central Bank, but the increases in the policy rate for the last four months have not been reflected in credit card and overdraft account interest rates.
Total ODA expenditure increase by 156.6 percent
With the calculation made from Fintürk data, the increase in total overdraft accounts in provinces in 2023 compared to 2022 was 155.6 percent. On February 6, 2023, when Hatay, Malatya, Adıyaman and Kahramanmaraş, which were most affected by the earthquake, were excluded, the total growth in overdraft accounts in the provinces compared to 2022 reached 156.6 percent. Due to the losses in the earthquake provinces, expenditures increased at lower rates compared to other provinces. In 2022, when the 4 provinces were excluded from the scope, the total overdraft expenditure was TRY 65 billion, while this figure increased to TRY 166.64 billion in 2023.
