Credit card interest rates are also on the horizon.

Expensive Citizens, who meet all their credit card needs by going over their limits, will face higher interest rates on their credit cards and overdraft accounts starting in August. Credit card interest rates are determined by the Central Bank’s monetary policy rate. It is taken for granted that the Monetary Policy Committee (MPC) will raise interest rates at its meeting on June 22. If the policy rate is increased from 8.50 percent to 17.50 percent, as forecast by the Central Bank’s market expectations survey, the maximum contractual interest rate to be applied in credit card operations could increase from 1.36 percent to 2.15 percent. According to the calculations, the interest rate of credit cards will increase to 2.36 percent in the scenario in which the policy interest reaches 20 percent, and to 3.26 percent in the 30 percent scenario.

MAY LOW IN AUGUST

Following the policy rate cuts initiated by the Central Bank in August 2022, the maximum interest rates that banks can apply to their credit card transactions have also decreased. The maximum contractual interest rate for credit card transactions, which was 1.80 percent before the policy rate cuts, has been applied to 1.36 percent since December 2022. Interest rates for next month’s credit cards are announced on the fifth business day from the end of each month. The experts stated that due to Eid al-Adha this month, even if the interest rate is increased, the reflection on credit card interest rates may be delayed until August.

Up to 60% from the beginning of the year

When the interest on consumer loans broke a record by reaching 60 percent, citizens took refuge in credit cards with 1.36 percent interest. Especially since the beginning of the year, the rate of increase in consumer loans has been 22.2 percent, while this increase has reached 60 percent on the credit card side. According to data from the Banking Supervision and Regulation Agency (BDDK), as of June 9, the volume of consumer loans reached 1 trillion 374 billion lira, and credit cards reached 1 trillion 62 billion lira. In other words, the citizen has credit card debt of up to 77 percent of consumer loan debt consisting of necessities, housing, and vehicles.