Credit card cash advance amount and banks due limit before election
Ahead of the election this weekend, some banks have begun to significantly reduce the amount and maturity that can be used on “credit card cash advances,” which have become the go-to lending channel for TL cheaper and more common for people due to the restrictions applied to other loans.
It has become the debt channel with the greatest individual demand in the last period, since it provides the lowest debt in terms of TL with a monthly interest rate of 1.36 percent for cash advances to credit cards or credit card advances. cash in installments.
THE DEMAND INCREASED AT THE CLOSE OF THE ELECTIONS
This area, which allows one to borrow at a very low interest rate of 20 percent per year compared to inflation that ran as high as 85 percent for a time, began to see increased demand as the election neared.
In contrast to the cash advance, which can be borrowed monthly at 1.36 percent interest, monthly interest rates for individual loans at some banks exceed 4 percent.
While the loan amount, which has increased based on the credit card limit, has been reduced regardless of card limits, 12-month maturities have been reduced to 6 months at some banks.
A banking source is in the midst of growing uncertainty before the elections and the expectation of an increase in interest rates. banks of this highly demanded debt channel. He said he reduced the use of
‘PEOPLE WANT CASH BECAUSE OF UNCERTAINTY’
“The demand for installment cash advances is very high. Due to the uncertainty before the elections, people want cash in their hands, there is a demand for dollars and gold. Because the costs in this channel are very low. Some banks also want to limit the use of low-interest loans, which are in high demand, because there is an expectation of interest rate increases.”
The bankers noted that the increased use of the corresponding TL-denominated loan also increased the amount of bonds that must be allocated for loan disbursement, determined by the Central Bank.
Another banker said, “According to the legal regulation, the upper limit of credit card interest is determined by the CBRT, and the upper limit is currently at the level of 1.36 percent. When we look at individual loans, this channel is by far the cheapest among the interest rates that go up to 4 percent. However, the demand has increased very seriously and since the sector does not have the right to determine interest rates, they are trying to find a solution to the excess demand by reducing the terms and amounts”.
THE NAME OF THE CENTER INCREASED AFTER
After the earthquake, the CBRT included consumer loans made available to consumers within the scope of the guarantee facility according to the applied interest rate. The CBRT introduced the obligation to hold qualified bonds at a rate of 20 to 90 percent, depending on the difference with the reference rate.
In the following weeks, the Central Bank exempted gold from the amount of 70 thousand TL and the earthquake zone from the application of setting values according to the new interest rate.
The bankers note that the use of credit cards for individuals began to increase after this step. (Reuters)