In Turkey, credit card spending has experienced a noticeable slowdown, marking the most significant drop in recent months. This trend affects approximately 28 million individual credit card users with outstanding balances. Currently, there are around 127.2 million credit cards and 192.8 million debit cards in use across the country.
Several regulatory measures have been implemented in the past year to curb credit card spending, including raising interest rates, lowering cash withdrawal limits from credit cards, introducing a three-installment limit on cash advances, and suspending credit limit increases. Additionally, increased financing costs and installment fees for purchases over two payments, combined with consumers reaching their credit card limits, have contributed to a decline in credit card usage, which had been at record highs.
Sharp Decline in Last 3 Months
The Central Bank’s weekly “Bank and Credit Card Sectoral Spending Statistics” provides insight into weekly card expenditures. As of October 11, the data reveals a general decline in card spending across almost all sectors, with just a few exceptions.
In the week of October 4, total spending on credit cards reached 328.5 billion Turkish Liras, marking one of the highest weekly figures since August’s 335.8 billion Lira. However, by October 11, despite an increase in transaction volume, spending dropped by 7%, or 22.6 billion Lira, to a total of 305.8 billion Lira. This is the sharpest weekly decline in the last three months.
Sector-by-Sector Breakdown
The decline was most pronounced in the services sector, with spending decreases noted in education and stationery, furniture and decoration, construction contracting, authorized vehicle services, tax payments, private pensions (BES), online shopping, and insurance. In contrast, some sectors, such as fuel, airlines, clothing, dining, and telecommunications, saw a slight uptick in card spending.
Both weekly and year-to-date comparisons show the most significant declines in sectors like electronics and computing, furniture, and insurance. Card-based tax payments have also shown a decrease over the past ten months.
This data suggests that both consumers and businesses may be feeling the impact of these new credit limitations and rising costs, prompting a reassessment of spending habits across various sectors. The trend reflects a broader effort by financial regulators to manage consumer debt and limit excessive credit reliance.
