BSP keeps ceilings on credit card transactions

BSP keeps ceilings on credit card transactions
According to the Credit Card Association of the Philippines (CCAP), the umbrella organization of the country’s 17 major issuers, credit cards serve as powerful tools of economic empowerment for women, as these increase their financial flexibility, opens them up for investment and financing opportunities, and improves overall quality of life,

MANILA, Philippines — The Bangko Sentral ng Pilipinas has kept existing cap on credit card charges to encourage consumers to borrow money from banks and spur spending in the consumption-reliant Philippine economy.

This means the maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder remains at 3% per month or 36% per year.

Similarly, the monthly add-on rates that credit card issuers can charge on installment loans is maintained at a maximum rate of 1%.

Meanwhile, the maximum processing fee on the availment of credit card cash advances stays at P200.00 per transaction.

The ceilings on credit card transactions are subject to review following a six-month period.

“The BSP’s decision to maintain the current ceilings on credit card transactions strikes a balance between providing consumers with access to credit card financing at steady rates and ensuring long-term viability of banks/credit card issuers so that they can continue to provide quality service to their clients,” BSP Governor Eli Remolona Jr. said.

Credit card receivables posted double-digit growth of 29.0% year-on-year as of end-May 2023, higher than the 17.1% registered a year ago, BSP data showed.

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