Credit card companies await revision of interest rate cap
The Credit Card Association of the Philippines, an organization of 17 major credit card companies, on Wednesday acknowledged the decision of the Bangko Sentral ng Pilipinas to maintain credit card interest rate caps amid the crisis persistent global health and rising interest rates.
CCSI said in a statement that it looks forward to a full review of the caps by PASB by January 2023.
“The review has always included micro and macroeconomic factors relevant to the times, in particular the rise in policy rates at the end of 2022,” the CCAP said.
The Bangko Sentral said on Tuesday that the caps would remain in effect unless revised by the BSP. These include the maximum interest rate or finance charge on a cardholder’s outstanding credit card balance of 2% per month or 24% per year; the maximum monthly mark-up rate on credit card installment loans of 1%; and the maximum processing fee on the use of credit card cash advances of P200 per transaction.
“The reasonableness of the caps will be subject to further review in January 2023,” the BSP said.
BSP stated that it is closely monitoring domestic and external developments that may impact the state of credit card funding, the sustainability of credit card operations, and the viability of banks/credit card issuers. credit card.
CCAP said it was optimistic that with the appeal letter it sent to the BSP in September, the latter had taken into account the factors impacting the entire credit card industry. .
“Throughout these pandemic years, the credit card industry has helped not only our members and all players in the payment ecosystem, but also our fellow Filipinos. Even though we faced unprecedented challenges, we also overcame these obstacles and built even more strength by helping each other in the true Bayanihan spirit,” CCSI said.
He said that with the pandemic spurring rapid consumer adoption of new virtual payment technologies, credit cards are an efficient, secure and convenient payment tool that drives and contributes to the country’s overall digitalization goal. .
“With market-driven tariffs, it will not only help drive competition in the industry, but also drive financial inclusion, all of which helps our Filipino consumers as a bottom line,” he said. declared.
The CCAP said earlier that the new law mandating registration of subscriber identity module or SIM cards will help fight credit card fraud and speed up digitalization in the country.