BSP okays credit card interest rate cap of 3%
January 23, 2023 - Monday 3:01 PM by Romeo Braceros Jr
The Monetary Board agreed to increase the maximum interest rate or financing charge imposed on a cardholder's unpaid outstanding credit card debt by 100 basis points (bps), or from two percent to three percent per month, to alter the ceilings on credit card transactions.
The current one percent cap on the monthly add-on rate credit card issuers can impose on installment loans is kept in place.
The highest processing cost for using a credit card cash advance is still P200 per transaction.
“The policy aligns the credit card interest rate ceiling with developments in the macroeconomy and cushions the impact of inflationary pressure on banks’/credit card issuers’ ability to provide quality credit card services to their clients,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla said.
The BSP put limits on credit card transactions as a temporary solution to help consumers who were struggling financially because of the COVID-19 outbreak and to encourage easy access to credit.
The BSP considered the low-interest rate environment that prevailed during the pandemic while setting the restrictions.
The increase in domestic interest rates caused by high inflation and BSP's efforts to combat it through repeated policy rate hikes are considered when the interest rate ceiling is adjusted.
It would assist financial institutions and credit card companies in covering the more significant expenses associated with the effective management of consumer transactions, including rapid and timely dispute resolution and the retention of qualified people.
Additionally, it will provide funds for long-term initiatives that institutionalize process changes, reinforce cybersecurity and IT systems, and foster innovation within these financial institutions that will improve consumer experiences.
Cop in P6.7B shabu drug haul in Manila dismissed
Police Master Sergeant Rodolfo Mayo Jr., a police anti-illegal drug intelligence operative arrested last year for over 990 kilos of shabu ...13 hours ago
Bong Go lauds groundbreaking of Super Health Center in Vintar, Ilocos Norte
Continuing his advocacy to improve the country’s health sector and establish more health facilities that would significantly benefi ...20 hours ago
PepsiCo offers US$20,000 grant to 10 start-ups in Asia
PepsiCo recently announced the launch of the PepsiCo Greenhouse Program—APAC edition. The 2023 program seeks to collaborate and sup ...20 hours ago
Supply chain financing growing market in PH
According to the International Finance Corp, the Philippines has about $20 billion in supply chain financing (SCF) assets that can be acc ...1 day ago