Credit card debt restructuring is a process by which unpaid installments are reorganized by the bank. A credit card debt restructuring request is made by following the current bank’s periodic campaigns and communicating directly with the bank to meet the terms they set. Therefore, each bank’s application requirements and interest rates may differ.
For people who want to consolidate debts using transfer methods and keep all obligations in a single place, banks offer different options and installment plans. There are restructuring options for 12, 24 and 36 months with differing interest spreads. Installment amounts and interest rates are determined according to the debtor’s income situation. A common feature among most banks in credit card debt restructuring is that installment amounts are set based on the borrower’s income.
How Is Credit Card Debt Restructuring Calculated?
The calculation of credit card debt installments is regulated. If the debt is restructured using a credit card product, the term is calculated at a maximum of 12 months. If the restructuring is done using a consumer loan, the term can extend up to 36 months.
According to recent regulations, the maximum applicable monthly interest rate for credit card debt restructurings was set at 1.79% for 2021. The maximum monthly default interest rate applicable to credit cards was set by the central bank at 2.09%.
Based on these interest rates, here is an example calculation for a 10,000 TL credit card debt restructuring:
- For a 36-month term on a 10,000 TL debt, the monthly interest rate is approximately 1.41%. The monthly installment would be about 373 TL and the total repayment would be 13,435 TL.
- For a 24-month term, the monthly interest rate would be 1.41%. Monthly payments would be 510 TL and the total repayment 12,303 TL.
- For a 12-month term, the monthly interest rate would be 1.41%. Monthly payments would be 928 TL and the total repayment 11,186 TL.
Restructuring Credit Card Debt with a 36-Month Term
Spreading a card debt over 36 months—that is, transferring the debt or using a loan commonly called credit card debt restructuring—is one of the most preferred options recently. The reason for its popularity is that borrowers can consolidate all debts into a single loan with a 36-month term, while pure credit card restructuring is usually limited to 12 months. With a 36-month restructuring option, borrowers can split their debt into smaller installments and avoid immediate legal proceedings.
Borrowers seeking to use this temporary regulatory provision must meet the following conditions:
- The debt must have originated before the effective date of the temporary provision.
- The debtor must apply for restructuring in person at the bank branch.
- Credit score should be sufficiently high.
- The borrower must present a signed income document approved by the bank.
How to Restructure Credit Card Debt Using Installment Cash Advance
Restructuring a card debt with a cash advance involves taking an installment cash advance on the credit card to pay off the entire debt, then repaying the cash advance in installments. In this case, a maximum 12-month term and a monthly interest rate of up to 1.79% are applied.
This method requires sufficient available credit limit on the card; the limit can sometimes be increased by contacting the bank to close the debt. It is recommended to discuss restructuring options with the bank after the debt has been covered by the cash advance.
What Happens If a Credit Card Debt Is Not Paid?
Failing to pay credit card debt can have serious consequences. Possible outcomes when card debt is not paid include:
- If the minimum or full payment is not made, default interest begins to accrue on the debt.
- If the minimum payment is missed three times within a year, cash usage on the card may be blocked. When the debt is paid, the card can be reactivated.
- If payments are missed three consecutive times, the card can be closed entirely. If the debt is paid, the card may be reactivated; continued nonpayment will lead to legal collection proceedings.
- Nonpayment negatively affects the borrower’s credit score.
- If a 90-day period is exceeded without payment, the bank usually grants a 7-day final notice to settle the debt. If payment is not made at the end of that period, legal collection begins. Legal follow-up often results in wage garnishment, where up to one-quarter of the debtor’s salary may be seized by the bank.
VakıfBank Credit Card Debt Restructuring
VakıfBank’s restructuring loan was offered in 2021 under the “Payment Convenience Campaign” within the VakıfBank Yanındaki Güç Paketi to help customers pay off credit card debts.
To benefit from this campaign, debts and credit limits from other banks must be closed and transferred to VakıfBank. The campaign allows VakıfBank individual credit card customers to restructure debt with terms up to 60 months. This restructuring can be offered at monthly rates of 1.10% for up to 24 months and 1.20% for terms up to 60 months.
For example, a restructured 20,000 TL debt would have monthly installments of approximately 1,813.10 TL for 12 months, 977.73 TL for 24 months, and 715.84 TL for 36 months.
To take part in the Payment Convenience Campaign, applicants must visit VakıfBank branches in person with the required documents.
Required Documents for VakıfBank Credit Card Debt Restructuring
Documents typically requested for debt restructuring are:
- Income document or payroll with a verified signature from the last 3 months,
- Document proving the debt owed to the other bank or recent card statement,
- Social Security (SGK) registration and service summary,
- Turkish ID card.
VakıfBank Statement Installment Service
VakıfBank’s statement installment campaign allows customers who pay at least the minimum amount of their most recent statement to split the remaining eligible balance into installments up to 6 months at a monthly interest rate of 1.79%, calculated from the transaction date. To use this credit card debt restructuring service, the application must be made one day before the statement due date.
How to Apply for VakıfBank Statement Installment Service
Applications for the statement installment service can be made via:
- Mobile Banking or Internet Banking,
- By calling the call center,
- At VakıfBank branches in person,
- By SMS: send TAKSİTLENDİR followed by the card’s last 6 digits and the desired number of installments to 5724.
Garanti BBVA “Skip Statement” Campaign
Garanti BBVA’s Skip Statement service allows customers to defer up to three statement periods without a minimum payment requirement, subject to contractual interest. After three deferred periods, the deferred total can be repaid in six installments following payment of the required minimum. Applications could be made until March 31, 2021, to defer and restructure debts under this program.
Applications for the Skip Statement campaign can be made via:
- Garanti BBVA Internet Banking payment area using the Skip Statement button,
- The Garanti BBVA mobile app in the credit cards section under payment solutions,
- By calling Garanti BBVA customer contact center.
Terms and Conditions for Garanti BBVA Skip Statement
Key conditions and features of the Skip Statement service include:
- Starting from the requested statement, the full statement balance can be deferred for that statement and the next two statements; the resulting bill after the deferral period is divided into six installments.
- A repayment schedule relating to the installment plan is provided together with the most recently issued statement.
- The installment arrangement can be canceled by paying the debt before the statement due date or via Internet Banking or the Customer Contact Center.
- Early repayment is allowed.
- Applications must be made between the statement date and one day before the due date; no payment is required at the time of application.
- Applications needed to be submitted by March 31, 2021 to be eligible under the specific promotion.
- Balances between 100 TL and 50,000 TL can be deferred; foreign currency (USD/EUR) statements are not eligible.
- The deferred balance carries a monthly interest of 1.79% excluding certain taxes and charges.
- After approval, if the card’s statement date changes, the calculated interest amount may vary.
- An approved Skip Statement request cannot be canceled afterward.
- If part of the deferred balance is paid, interest is calculated on the remaining balance.
- Both primary and supplementary cards may be eligible.
- Cards under more than 30 days past due or already in collection status are not eligible.
- Detailed explanations about the deferred payment, deferred balance and applied interest are provided on each billed statement.
Akbank Credit Card Installment Campaign
Akbank’s debt restructuring service allows credit card debts to be transferred into Axess’s “Installment Debt Transfer” campaign. With this campaign, Axess or other banks’ credit card debts can be transferred and repaid in installments for up to 9 months at favorable rates.
Axess cardholders and customers visiting Akbank can benefit from the credit card installment program. Certain card types such as corporate or specialty cards may be excluded from the service.
Benefits of Akbank Credit Card Installment Service
Advantages of the restructuring campaign include:
- No fee for the Installment Debt Transfer service.
- Within available credit limit, a minimum of 200 TL and a maximum of 20,000 TL can be transferred.
- The monthly cost rate, including all fees for the offered amounts and terms, is 2.42% (annual cost rate 29.09%).
- Monthly installments include interest, taxes and funds in the shown amount.
How to Apply to Akbank’s Installment Campaign
Application channels for Akbank’s restructuring campaign are:
- Akbank Internet Banking,
- Akbank mobile app,
- Akbank phone branches at the provided numbers,
- Akbank branches in person.
Halkbank Credit Card Debt Restructuring
Halkbank card debt restructuring allows Paraf card debts to be restructured for terms up to 12 months at a 1.79% interest rate. Channels to apply for Halkbank’s credit card debt restructuring campaign include:
- Halkbank Internet Branch,
- Halkbank Mobile Branch,
- Halkbank call center,
- Halkbank branches in person.
Participation Conditions for Halkbank Debt Restructuring
Terms and features of the debt restructuring campaign are:
- The number of installments can be chosen by the customer up to 6, 7, 8, 9 or 12 months.
- Only primary cardholders are eligible for the application.
- As of the application date, the card’s last statement balance and in-period transactions may be installmentized within limits of 150 TL to 30,000 TL. Pending installments, and fees or taxes accrued up to the application date, are not included in the totaled amount for restructuring.
- When a debt is installmentized, both a payment equal to the total debt and an installment sales transaction for the restructuring appear on the card’s statement.
- Until the final installment of the restructuring is posted to the card, the card cannot be re-requested for a new restructuring.
- Once the debt installment process is completed, cancellation on the same day can be made via the call center or Internet Branch.
- No product in the banking system should be in legal follow-up to qualify.
- Commercial credit cards are excluded from the application.