BSP adjusts interest rate ceiling on credit card transactions | BusinessMirror

The Monetary Board decided to adjust the ceilings on credit card transactions by increasing the maximum interest rate or finance charge imposed on a cardholder’s unpaid outstanding credit card balance by 100 basis points or from 2 percent to 3.0 percent per month. Meanwhile, the existing ceiling on the monthly add-on rate that credit card issuers can charge on installment loans is maintained at a maximum rate of 1 percent.

The caps on credit card transactions were imposed by the BSP as a temporary relief measure to ease the financial burden of consumers from the COVID-19 pandemic and promote affordable access to credit. In fixing the caps, the BSP considered the prevailing low interest rate environment during the pandemic.

Given these circumstances, the BSP deems that the adjustment in the interest rate ceiling for revolving purchases is in keeping with the BSP’s mandate to determine the reasonableness of credit card fees and charges under Section 4 of the Philippine Credit Card Industry Regulation Law or R.A. No. 10870.

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BSP adjusts cap on credit card interest rate to 3% per monthThe BSP said this adjustment will increase the maximum interest rate or finance charge imposed on a cardholder’s unpaid outstanding credit card balance by 100 basis points (bps) or from 2% to 3% per month. The existing ceiling on the monthly add-on rate that credit card issuers can charge on installment loans is maintained at a maximum rate of 1%, the BSP said.
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