Update on Credit Card Monthly Interest Rate Allowed under BSP
CREDIT CARD MONTHLY INTEREST – Bangko Sentral ng Pilipinas (BSP) spoke on the maximum interest rate allowed on balances of credit cards.
A lot of Filipinos have at least one (1) credit card. There are a lot of people who use their credit cards for specific purposes like buying groceries, paying for the utility bills, getting the kids’ tuition fees fully paid at the start of the semester, maintaining the house and car, etc.
In some cases, there are credit cardholders who solely use their cards for emergency situations like when the salary did not get to the next payday or an unexpected medical emergency took place. Credit cards are among the best preparations for unforeseen situations.
However, undeniably, many people are hesitant to get a credit card because of others’ bad testimonies. Truth be told that there were credit cardholders who were not able to use their cards well thus they were left in debt. Another factor is the interest rate.
With regards to the credit card monthly interest rate, the maximum interest rate abides by the rate allowed by Bangko Sentral ng Pilipinas (BSP) or the Central Bank of the Philippines.
Based on a report on ABS-CBN News, BSP keeps the credit card monthly interest rate ceiling at 2%. The said maximum interest rate on credit card transactions was first imposed in September 2020. The Central Bank stressed in a statement that it remains in effect unless changed by the BSP.
Reportedly, under Circular No. 1098, the maximum interest rate or finance charge on the unpaid balances of credit cards must be at 2% per month or 24% annually. With regards to the monthly add-on rates that issuers may charge on installment loans, they are kept at 1%. The BSP also maintained the processing fee on credit card cash advances availment at P200.00 per transaction.
You may also visit – Asian Development Bank Approves Another P20.9 Billion Loan to PH
