Turkey's Credit-Card Crunch

The Turks love to flash plastic. They use credit cards for more than 30 percent of all purchases—everything from candy bars to widescreen TVs—according to Garanti Bank, the country’s biggest card issuer.

Now the Turkish government is trying to cool their passion. The authorities remember financial crises past that started with the banks, and they don’t want a repeat. Credit-card debt has risen 20 percent this year, after a 23 percent increase in 2010. Alarmed, Turkish regulators are blocking some consumers from using credit cards to borrow cash at automatic teller machines. The ban hits cardholders who have failed to pay off at least 50 percent of their balances during three of the preceding 12 months. That affects an estimated 3.7 million delinquent cardholders, and 2.5 million others who make only their required minimum monthly payments, which are generally less than half the balance.