BSP keeps 2 percent ceiling on credit card monthly interest rate

ABS-CBN News

Posted at May 31 2022 11:12 AM

A close-up image showing a Mastercard credit card on a computer keyboard in Frankfurt, Germany, Sept. 10, 2016. Mauritz Antin, EPA-EFE/File
A close-up image showing a Mastercard credit card on a computer keyboard in Frankfurt, Germany, Sept. 10, 2016. Mauritz Antin, EPA-EFE/File

MANILA - The Bangko Sentral ng Pilipinas on Tuesday said it has kept the maximum interest rate and finance charge on credit card balance and transaction fees which it has imposed in September 2020.

"The ceilings on credit card transactions remain in effect unless revised by the BSP," the central bank said in a statement. 

Under Circular No. 1098, the ceiling for interest rate or finance charge on the unpaid outstanding credit card balances should be at 2 percent per month or 24 percent per year, the central bank said in a statement

Monthly add-on rates that issuers can charge on installment loans were also retained at a maximum of 1 percent, it added.

Maximum processing fee on the availment of credit card cash advances will also stay at P200 per transaction, the BSP said.

“The decision of the Monetary Board will continue to help ease the financial burden of consumers through affordable credit card pricing amid the ongoing COVID-19 pandemic," BSP Governor Benjamin Diokno said. 

"It will also allow the BSP to assess the impact of the improvement in macroeconomic fundamentals and easing of mobility restrictions on the performance of the credit card industry," he added. 

Demand for credit cards moderated in the second half of 2021 as customers shifted to digital products, the BSP said.

The number of credit cards issued and outstanding still grew "a modest" 0.3 percent to 10.3 million, it added.

Diokno earlier said lowering the ceiling for credit card interest rate and fees would bring the country closer to the standard of its peers. 

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