Why "interest-free" almost never is
Merchants pay the bank a commission for offering installments — typically 4%–12% of the transaction value, depending on term length. This commission has to come from somewhere, and the merchant has three options:
- Eat the commission (rare on big-ticket items).
- Raise the sticker price for everyone so installment buyers cover the cost.
- Offer a cash discount, effectively pricing the installment premium separately.
Option 2 is the most common in Turkish retail. The "sticker" price you see is the installment price; the cash price exists but you have to ask. If you pay upfront without asking, you are paying the installment premium with no installment benefit.
The 3-second test at the register
Ask one question: "Peşin alırsam ne kadara verirsiniz?" (How much if I pay cash?) Three things can happen:
- Same price: The merchant is eating the bank commission. Installment is genuinely free for you. Take it if you want.
- Lower price: The difference is your real installment cost. Compute the implied interest rate before deciding.
- Awkward silence: They have a cash discount but don't advertise it. Negotiate.
Computing the implied interest rate
Say a TV is listed at 24,000 TL in 12 installments, or 21,600 TL cash. The implied total cost of financing is 24,000 − 21,600 = 2,400 TL on a principal of 21,600 TL — about 11.1% total over the period. To compare against your savings rate or another loan, annualize using monthly equivalent rate:
(1 + 0.111)^(12/n) − 1, where n is the term in months.
For 12 months, that works out to roughly 11.1% APR equivalent — meaningful when current deposit rates are higher. For 6 months it's effectively a 22%+ APR. The shorter the term, the worse the deal on an annualized basis.
When installment actually wins
Installment is a good deal when one of these is true:
- The merchant gives no cash discount (you would pay 24,000 either way).
- You can keep the cash earning more than the implied rate elsewhere (deposit, money market fund).
- You genuinely cannot pay upfront and the alternative is a credit card revolving at 4%+ monthly.
- Inflation is high and locking in nominal lira payments over time effectively discounts them.
That last point is real but smaller than people think — if implied financing is 11% over a year and inflation is 35%, you still come out ahead, but not enough to ignore items 1–3.
The credit card "revolving" trap
Different from store installments: if you put a single non-installment purchase on a credit card and pay only the minimum, the unpaid portion revolves at the credit card rate — often 4–5%+ monthly. Over a year this is 60%+ APR. This is the most expensive consumer credit available in Türkiye. Installments are dramatically cheaper than revolving balances; the question is only whether installments are cheaper than paying cash.
Quick checklist before any installment purchase
- Ask for the cash price.
- If there's a difference, treat that difference as the cost of financing.
- Compare that cost to current deposit rates and credit card revolving rates.
- Pick the cheapest path. Don't default to either cash or installment out of habit.