Turkey limits installment plans for credit cards, loans

The use of installments for credit card shopping and loans in Turkey will be governed by new regulations under a decree published in the Official Gazette on Wednesday.

The term of installment payments for credit cards cannot exceed 12 months for purchases of goods and services, says the decree.

For electronic appliances, the period is three months, as well as six months for expenditures on computers, travel, logistics, and accommodation, and nine months for spending on health, social services, and taxes.

In addition, purchases of telecommunications, alcoholic beverages, cosmetics, food, meals, fuel, jewelry, office equipment, gift cards, and expenses abroad cannot be split into installments.

According to the Official Gazette, vehicle loans can last no longer than 48 months, consumer loans 36 months, and computer/cellphone loans six months.

The regulation enters into force on Sept. 1 and is carried out by Turkey's Banking Regulation and Supervision Agency's (BDDK).

On Aug. 2, the BDDK released draft proposals to support financial stability and macroeconomic equilibrium in Turkey.

The proposals aim to encourage conscious consumption and cautious borrowing, the agency said.

Mehmet Ali Akben, head of the BDDK, told Anadolu Agency: "The proposals aim to bring down inflation, the current deficit, imports and household indebtedness."