BSP retains COVID-19 shield for credit card users
Banking regulators kept the cap on interest on credit card transactions at 2% per month or 24% per year, citing the need to help consumers amid the continued impact of the COVID-19 pandemic.
The Bangko Sentral ng Pilipinas said the maximum interest rate or finance charge on a cardholder’s outstanding credit card balance remains at levels set in September 2020.
This means that the additional monthly rates that credit card issuers can charge on installment loans are still at a maximum rate of 1%.
In addition, the maximum processing fee on the use of credit card cash advances remains at P200 per transaction.
“The Monetary Board’s decision will continue to help ease the financial burden on consumers through affordable credit card pricing amid the ongoing COVID-19 pandemic,” BSP Governor Benjamin Diokno said. in a press release.
Maintaining the cap on interest rates and charges “will also allow the BSP to assess the impact of improving macroeconomic fundamentals and easing mobility restrictions on the performance of the credit card industry. “Diokno said.
BSP data shows that in the second half of 2021, demand for credit cards declined as consumers shifted to alternative digital products.
The number of credit cards issued and in circulation rose 0.3% to 10.3 million.
But monthly card billings jumped 34% year-on-year to 100.6 billion pesos, while credit card receivables rose 4.9% year-on-year.
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