Credit card debts continue mounting in Turkey

The average credit card debt per capita has surged by 12.9 percent in August compared to the same period last year, secular opposition daily Cumhuriyet reported on Sunday.

Average unpaid consumer loans or credit card debts per capita in August was 4,485 lira ($775) compared to 3.794 lira ($655) last year, Cumhuriyet said.

Meanwhile, the rate of non-performing loans has increased to 6.6 percent from 6.1 percent compared to the same period in 2018.

Credit card debt has grown exponentially since Turkey emerged from a financial crisis in 2001. Clients who fail to repay the debts face heavy charges, or banks encourage them to turn the debt into a consumer loan, freeing up the credit card for more spending.

Turkey’s economy slumped into a recession in the second half of last year after a currency crisis peaked in August. Economic confidence in Turkey dropped in May to its lowest level since the currency crisis. The lira fell 28 percent against the dollar last year and has lost about 13 percent of its value since January.

Turkey’s Treasury and Finance Minister Berat Albayrak has introduced seven economic packages to recover the country's economy from financial bottleneck since his father-in-law President Recep Tayyip Erdoğan appointed him to take charge of the economy 10 months ago.
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