Turkish Credit Cards: Prisoner's Dilemma

July 15, 2008


Paris, France 15 July 2008

The Turkish credit card market, which has developed rapidly over the last decade, represents a high growth opportunity. However, the Turkish government has decided to regulate this market stringently and put a ceiling on credit card interest rates.

In the past two years, the maximum allowable monthly interest rate on Turkish credit cards has decreased from 5.72% in July 2006 to 4.39% in June 2008. Furthermore, the government recently announced its intention to slash monthly interest rates to 2.7%. This proposed regulation will dramatically impact credit card issuers’ profitability and force them to reshape their strategies to remain competitive. The profitability breakdown across customer segments will shift fundamentally with the new interest rate.

Turkish banks will be compelled to focus on cost reduction in order to sustain credit cards’ profitability, as well as improve customer relationship management to steer clients toward more profitable products and services.

"While banks’ card strategies over the past few years have focused almost exclusively on issuing an ever-increasing number of cards, this approach will have to yield to a more nuanced approach, where identifying and nurturing customer segments and relationships becomes a paramount concern," says Perrine Fiorina, an analyst with Celent’s Banking group and co-author of the report.

This report first provides an overview of the Turkish credit card market and explains the major regulations. It then analyses the likely evolution of this market, given the current competition and the impact of regulation on banks’ profitability. Finally, it explores the strategic implications and provides recommendations that will enable Turkish banks to continue to succeed. These strategies include:

  • Rethinking credit card operations, including better managing new lines of credit, stimulating transactions, capturing new accounts, adjusting fee structures, and reviewing costs and efficiency.
  • Changing approaches in banking more widely, including a more customer-centric approach, implementing new targeting and retention frameworks, and innovating in distribution and partnering with retailers.

The 24-page report contains 11 figures and 6 tables. A table of contents is available online.


Members of Celent's Retail Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.


Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

Paris, France 15 July 2008

Executive Summary 3
Introduction 4
  Overview of the Turkish Credit Card Market 4
Major Regulations in the Turkish Credit Card Market 7
What Will Happen? 9
  Competitive Landscape 9
  Impact on Banks' Profitability 11
How to Succeed? 15
  Strategic Implications 15
  Next Steps 18
Conclusions 22


Sign in to download reports and access personalized information