Thursday, January 27, 2011

Reader Question on Credit Cards

Reader "Me" made the following comment to my latest Hurriyet Daily News & Economic Review column:
Greetings Emre Bey! Excellent article once you think about it a bit! I also wanted to know if you had read the credit card article in today's paper??? I just would be so interested in finding out what amount of carryover debt there is. And also how many defaults they are seeing. I still think this would be an excellent topic for you to take on. It might help a few families avoid the credit card crunch. Times are tough everywhere and there is no need for people to get caught up in the credit market if they are educated. Better hurry.
Here's a partial answer to her question, again using the maxim that a picture is worth more than a thousand words:
We have NPL info. as well, but for all loans; as far as I know, they are not differentiated for credit cards... BTW, as the legends say, these are for individuals, as that's what Me was asking. But we have the same data for corporates as well.

While there is a boom in both figures, I find particularly interesting the jump in past-due credit from late to 2008 to late 2009; the crisis effect is apparent there. I guess it hasn't passed tangent after all, contrary to what the PM often claims. But we already knew that, right?

One final disclaimer: Care is needed in interpreting these graphs: Drawing consumer credit for small amounts is very common in Turkey as well, so these figures should always be used together with loan data before jumping to conclusions about consumer patterns...

BTW, here's the article Me was referring to....


high risk merchant accounts said...

Credit card is often uses as payment system nowadays because it was safe. No need to get more cash in your wallet when doing shopping.

Serge said...

If people would learn to be responsible with their payments and avoid spending beyond their means, they would profit a lot more with the freebies that come with the card rather than end up drowning in debt.