THE Bangko Sentral ng Pilipinas (BSP) has set a ceiling on the annual interest rate on all credit card transactions in the country.
In a press briefing on Thursday, BSP Governor Benjamin Diokno announced that the Monetary Board approved the 24 percent cap, which will take effect on November 3 and shall be subject to review every six months.
“This means that interest or finance charges on a cardholder’s unpaid outstanding credit card balance should not exceed 2 percent per month. Said outstanding balance arises from retail purchases, in the case of revolvers; or from cash advances,” he said.
According to the BSP, the new issuance prescribes a separate interest rate ceiling for credit card installment loans. For these transactions, credit card issuers may only charge monthly add-on rates up to a maximum of one percent.
No other charge may be imposed by credit card companies on cash advances except for a maximum processing fee of P200 per transaction.
The new regulation also waives the requirement for credit card issuers to notify the cardholder of the said changes in interest or finance charges at least 90 calendar days before such changes take effect.