BSP keeps COVID-19 shield for credit card users

Bank regulators have kept the interest cap on credit card transactions at 2 percent per month or 24 percent a year, citing the need to help consumers amid the continuing impact of the COVID-19 pandemic.

The Bangko Sentral ng Pilipinas said the maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder remains at levels set in September 2020.

This means that monthly add-on rates that credit card issuers can charge on installment loans is still at a maximum rate of 1 percent.

Further , the maximum processing fee on the availment of credit card cash advances remains at P200 per transaction.

“The decision of the Monetary Board will continue to help ease the financial burden of consumers through affordable credit card pricing amid the ongoing COVID-19 pandemic,” BSP Governor Benjamin Diokno said in a statement.

Keeping the cap on interest rates and charges “will also allow the BSP to assess the impact of the improvement in macroeconomic fundamentals and easing of mobility restrictions on the performance of the credit card industry,” Diokno said.

BSP data show that in the second half of 2021, demand for credit cards waned as consumers shifted toward alternative digital products.

The number of credit cards that were issued and outstanding increased by 0.3 percent to 10.3 million.

But monthly card billings surged by 34 percent year-on-year to P100.6 billion while credit card receivables grew by 4.9 percent year-on-year.