BSP Cites Credit Card Interest Rate Limit set amid Crisis
CREDIT CARD INTEREST RATE – Bangko Sentral ng Pilipinas spoke on the limit it set for the interest rate on transactions using credit cards.
Many people in the Philippines now are credit cardholders. Some individuals even have multiple credit cards that they use for several purposes. Some people use a card for grocery spendings, paying utility bills, and making huge purchases. There are several credit cards that offer split payments or installments making huge purchases more affordable and bearable.
Some people solely use their credit cards for emergency cases or unexpected spendings. Truth be told that it is one of the excellent preparation for unforeseen circumstances like hospitalization. You can use it in paying for the bill and have extra time to pay for the amount depending on your credit card’s features.
Credit cards’ reputation is undeniably tainted by accounts that incurred huge debts. While credit cards are aligned for the benefit of the cardholders, a cardholder must be disciplined enough when it comes to spending using the card. Truth be told that it gives cardholders access to a lot of financial transactions.
The transactions made using the card may obtain interest depending on the rate set by the bank and the cap set by the Central Bank (Bangko Sentral ng Pilipinas). Based on a report on ABS-CBN News, BSP is maintaining the credit card interest rate cap at 2% per month.
The said credit card interest rate limit was first imposed in September under Circular No. 1098 released by the Central Bank. Based on the report, the bank explained that the retention of the rate is in line with the low-interest-rate environment now.
With regards to the monthly add-on rate issuers are allowed to implement on installment loans, the Central Bank said that it remains at 1%. With regards to the processing fee for credit card cash advances, the cap is set at P200.00.
READ ALSO: Credit Cards: Guide on How Freelancers Can Increase Chance of Application Approval