Credit card debt at alarming levels

ISTANBUL

The number of people with card or loan debt had reached fairly alarming levels as of June

Credit card and personal loan debt has reached alarming levels in Turkey as the number of people with card debt and loan debt surpassed 680,000 as of June, while the amount was around 822,000 in all of 2012, according to the latest report by the Turkish Banks Association (TBB).

The number of people who couldn’t pay their credit card debt reached almost 400,000 by the end of June, although the amount was around 450,000 for all of 2012. While around 100,000 people couldn’t pay their credit card debt in May, the number increased to 120,000 in June. Around 200,000 people couldn’t pay their credit card debt or repay their bank loans in June, although the same amount was around 130,000 in January of 2013.

Credit card debt became one of the hottest topics in Turkey in mid-July after Prime Minister Recep Tayyip Erdoğan publicly slammed banks for collecting large sums of money from the “poor.” “Those credit cards: Don’t have them. If everybody spends as much as they [banks] want, they would not even be able to earn that income. They could never be satiated,” he said July 16.

Then, Turkish Deputy Prime Minister Ali Babacan said July 19 that credit cards should not be used for loans but rather for payment purposes. Babacan noted that credit cards were the most expensive way of borrowing and that they had been working for the responsible use of credit cards.