Turkey's banking watchdog BDDK has stopped allowing credit card payments by instalment for foreign travel, prompting criticism from the local tourism industry.

The move rules out such payments for items including flights, travel agency fees and accommodation.

The BDDK said the curb was introduced as one of a series of coordinated steps aimed at strengthening financial stability.

Turks, who travelled abroad, spent $1.8bn in 2Q23, up 67% y/y, the Turkish Statistical Institute (TUIK, or TurkStat) reported earlier this week. Some 2.9mn Turkish nationals visited foreign countries in the quarter, marking a 73% y/y increase.

Rampant inflation in Turkey often means Turks find it cheaper to book a package holiday in destinations such as Egypt, rather than holiday at home.

Under the new credit card rules, Turkish travellers will have to make payments in cash, Koray Kucukyilmaz, deputy general manager at Setur Turizm, told business daily Dunya.

The cost of vacationing abroad was already high due to exchange rates, meaning travellers are left with few options, he added, saying: “This [regulation] will definitely have consequences.”

Cem Polatoglu from the Tour Operators’ Platform noted that travel operators were having a hard time because of the weaker Turkish liras and visa issues. “The credit card curb has dealt another blow to the industry,” he said.

Many Turks fail to get a visa to travel abroad.

“The tour operators were already adversely affected by unfavourable developments in the economy. They also lost customers because of visa problems. Our business was down around 30% to 35%... This is the third blow,” Polatoglu said.

An operator that organised foreign tours for 1,000 people last year may not even have 100 customers this year, he reflected.