Credit Card Users Beware: Increase Multiplied by 5 Times with Explanation – Breaking News
The significant increase in consumer credit levels is leading citizens to explore alternative payment methods, as reported by Milliyet.com.tr. Due to restrictions on installment options for credit card expenses and limitations on cash withdrawals, individuals are increasingly opting to make purchases without installments.
Since the beginning of 2023, the volume of installment-free credit card usage has surged from 226.6 billion TL to 1 trillion TL, marking a fivefold increase in spending without installments. This trend reflects citizens’ efforts to fulfill their needs without relying on installment plans.
On the other hand, installment spending has also seen a substantial rise, with the installment individual credit card volume growing from 224.5 billion TL to 528.6 billion TL.
Economist Muhammet Bayram highlighted that the affluent segment of society is more inclined to make payments without installments. This group, which has benefited from recent inflation, prefers to settle their debts in a single payment rather than spreading them out over several installments. The combination of high spending and restricted credit card installment options is pushing individuals towards non-installment spending.
The primary reason for the surge in non-installment usage is the perceived inadequacy of credit card limits. Citizens are opting for immediate single payments instead of spreading out their purchases over installments. Additionally, individuals who have experienced a boost in wealth due to inflation are more inclined to make lump sum payments.
The concern that product prices may rise further in the future could also be driving the current trend of increased credit card usage. As household inflation expectations remain high, citizens are motivated to make purchases now to avoid potential price hikes.
Looking ahead, with an expected inflation rate of around 40 percent by the end of the year, continued growth in credit card spending is anticipated. The challenge of accessing traditional loans, coupled with high interest rates on loans for essential needs, is further pushing individuals towards credit card usage.
In conclusion, the prevailing economic conditions are reshaping consumer behavior in the financial realm. As individuals navigate the challenges of inflation and limited credit options, the adoption of alternative payment methods, such as single payments on credit cards, is on the rise.
