A step back for a credit card cash advance from the Central Bank!

The Central Bank took a step back regarding the recently announced limits on the use of credit card cash advances and overdraft account loans. As it is known, within the scope of the said limitation, it was decided that 30 percent of the credit card expenditures and cash withdrawal transactions would be subject to the security establishment. However, this situation has now changed.

Limitation will not be applied for cash advance from credit card

According to the spokesperson’s report, the Central Bank has decided not to impose any restrictions on the use of cash advances from credit cards and overdraft accounts. At this point, in the statement sent to the banks, it was stated that jewelry expenditures and cash withdrawals through individual credit cards will be excluded from the securities facility according to the loan type.

Housing, agriculture, tradesmen, SMEs, export and investment loans and loans extended to financial institutions, corporate credit cards and overdraft account loans extended to consumers were also exempted from the establishment of securities according to loan growth.

With the new regulation published by the Central Bank on May 16, 2023, it brought a security obligation in consumer loans. Within the scope of this obligation, it was decided that 30 percent of the credit card expenditures and cash withdrawal transactions would be subject to the establishment of securities.

According to the information received from banking sources, consumers were meeting their needs with this cash advance. In other words, they used the cash advance as a kind of consumer loan. With the securities requirement, most banks have closed cash advance withdrawals from credit cards as of Monday. As mentioned above, a step back was taken shortly before this decision.

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