New rules on long-term credit card repayments on foreign goods is part of Turkey's fight against its trade deficit. Now figures suggest it is working.
"There should be warnings on credit cards like the ones on cigarette packaging".
This is the view of one prominent Turkish psychiatrist this week in a country where 55 million credit cards are in use, making
In Turkey's battle to reduce its significant trade deficit, regulations brought in to change how people use their credit cards are beginning to take effect.
Turkey has been fighting against its significant foreign trade deficit –
In response, the
Since February, Turkish consumers were prevented from having installment repayment periods of longer than nine months. Items like food, oil, jewelry and telecommunication purchases can no longer be split into installments.
And although "Stop. Think. Then shop" is one of the warnings issued by Prof.
Kutlug Doganay, an economic analyst with IS Investment, praised the regulations since consumers' "foolish and irresponsible" purchases paved the way to an increase in the foreign deficit.
Doganay said final products, mainly in electronics, are not produced in
The regulation agency appears to have achieved its intended goal. According to
Consumers now seem to be using credit cards for lump-sum payments. According to the Interbank Card Center, in April, such purchases with credit cards rose by 18 percent compared to the same month last year, while installment purchases decreased by 14 percent, the banking regulator said.
Turkey's Deputy Prime Minister responsible from economy,
"The current conditions will reduce the profitability of banks," said Doganay, "however, the banks compensated for their losses thanks to the latest rise of interest rates".
Prof. Tarhan sees the developments and reducing purchases a positive step.
"Impetuous and impatient people can have trouble in managing their budgets since they do not contemplate if the purchase is for their need or desire," says Tarhan.
"Credit cards, since people do not consider them as money, ease their desire for purchase," he adds.
IS Investment analyst Doganay said Turkish credit card holders are mostly responsible users and pay their debts regularly, despite some bad examples, which are more publicized because of the dramatic situation of bankrupted individuals.
He agrees with Tarhan on how much credit cards can be tempting since they enable people to make major purchases with minor payments and unbalance their budget management.
However, not everybody is pleased with installment restrictions.
The head of Turkey's Small and Medium-Sized Enterprises Association claimed last week that the regulation over jewelry sales is unfair and that jewelry retailers are the biggest victims of the measures.
Most Popular Stories
- Hernandez lawyer: Pats Records Dispute Resolved
- Honda' s Accord Plug-in Hybrid Is a Fuel Miser
- National Retail Federation Reduces Sales Forecast
- Social Media Startups That Pay You to Post
- Congress Leaving Town as Deadlines Loom
- Female Business Owners Still Face Gender Gap
- Amazon Fire Phone Improves on Familiar: Review
- Oregon Voters to Decide on Recreational Pot
- 4th Circuit Upholds Obamacare Subsidies
- Oregon to Vote on Recreational Marijuana