Higher interest rates have not deterred consumers from borrowing more. Consumption-based individual indebtedness is increasing at high rates. Individual credit card debt and overdraft accounts increased significantly in the first 9 months of the year.
Policy rate hikes by the Central Bank of the Republic of Türkiye (CBRT) increased the credit card interest rate from 1.36 percent to 3.66 percent and the overdraft account rate from 1.66 percent to 4.72 percent. Despite these significant increases, individual credit card debt increased by 180.2 percent in the January-September period of this year, compared to last year, and reached TRY 348.2 billion according to Banking Regulation and Supervision Agency (BDDK) data.
Overdraft account debt rose by 177.6 percent in the same period. In 9 months of this year, the total debt of the provinces in overdraft accounts with very high interest rates reached TRY 141.24 billion. This is 177.6 percent higher than the debt of TRY 50.8 billion in the same period last year.
83% of Turkey’s credit card debt increased by 150-200%
In every province, credit card debt rose at least by 150 percent. Personal credit card debt increased by 200 percent or more in 14 provinces, and all other provinces increased between 150 and 200 percent. In other words, the personal credit card debt of 83 percent of Turkey increased 2.5 times. The remaining 17 percent experienced increases of 3 times or more. In overdraft accounts, the debt of 6 provinces increased by 200 percent or more, and 61 provinces increased between 150 and 200 percent. Individual overdraft account debt of 75 percent of Turkey increased between 150 and 200 percent.