Now here is a great reason for you to get a credit card. Banks will soon start charging lower interest rates on credit cards and other fees. It comes after Bangko Sentral ng Pilipinas (BSP) imposed limits on credit card fees, in line with its consistently low key rate.[1] in the midst of the COVID-19 crisis.
Coupled with the 60-day moratorium on loan repayments under the Bayanihan to Recover As One Act, the cap on interest rates and credit card fees will allow Filipinos to free themselves from financial hardship during the pandemic . If you are already a card holder, this is a good opportunity to pay off your credit card debt.
That you are apply for a new credit card or currently have one, here’s what you need to know about the newly imposed restrictions on credit card interest rates in the Philippines.
What is the limit on interest rates and credit card charges?
The BSP published the circular n ° 1098[2] which sets the maximum interest rates and fees for credit cards in the Philippines. All banks regulated by BSP are mandated to implement the new tariffs as of November 3, 2020.
The limit on credit card interest rates and other charges will be reviewed by the BSP every six months. So expect the numbers to change depending on the country’s current economic situation.
2% credit card interest rate limit
Under the BSP Circular, credit card providers can only charge up to a 2% monthly finance charge (or an annual interest rate of 24%) on the cardholder’s outstanding balance. The credit card interest rate cap applies to simple payments and cash advances.
Previously, the average credit card interest rate in the Philippines was 3.50% per month or 42% per year. With the new limit imposed by the BSP, credit card interest rates have fallen by about 1.50 percentage points per month or 18 percentage points per year.
In addition to lowering their credit card interest rate to 2%, banks are also required to share with their customers a detailed but simple and easy-to-understand explanation of how they calculate their fees and charges.
1% credit card payout rate limit
A separate credit card interest rate cap will be charged on installment plans, including balance transfer and balance conversion. For such installments, banks can only charge up to a 1% monthly mark-up rate.
Cash Advance Fee Limit for P200 Credit Cards
When you make a cash advance on or after November 3, you will be charged a flat fee of just PHP 200 per transaction. According to the BSP, no other fees should be charged on cash advances by credit card, except for this lump sum.
Associated article: 12 credit card fees in the Philippines to watch out for
Updated credit card interest rates in the Philippines
In line with the BSP cap on credit card interest rates and other charges, most commercial banks in the Philippines have announced their respective new rates.
So far, none of the banks have set credit card fees and charges below the cap rates. Some credit card providers have increased their late payments and over-limit fees, apparently to make up for lost opportunity costs due to the mandatory lowering of interest rates.
Below are the updated interest rate and credit card fee tables from banks in the Philippines, at least for 2020 to 2021. Credit card fees that are not included in the tables remain the same. same.
BPI 2020 Credit Card Fees
BPI Credit Card Fees | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Special Installment Plan (SIP) and SIP Loan Variants with Additional Rates | 1% monthly supplement | November 3, 2020 |
Interest rate on cash advances | 2% | November 3, 2020 |
Cash advance fees | 200 PHP per transaction | November 3, 2020 |
Metrobank 2020 Credit Card Fees
Metrobank Credit Card Fees | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Balance transfer, Cash2Go and balance conversion fees | 1% monthly supplement | November 3, 2020 |
Cash advance fees | 200 PHP per transaction | November 3, 2020 |
Security Bank Credit Card Fees 2020 to 2021
Security Bank Credit Card Fee | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Balance transfer, Cash loan, balance conversion, conversion to ChargeLight and SimplyPay | Monthly supplement of 1% on all tenors | November 3, 2020 |
Cash advance fees | PHP 200 per transaction (peso accounts) / USD 4 per transaction (dollar accounts) | November 3, 2020 |
Late payment fees | 1.5% of the total amount due | January 25, 2021 |
Minimum amount due | PHP 500 or 3% of total amount due, whichever is greater (peso accounts) / USD 10 or 3% of total amount due, whichever is greater (dollar accounts) | January 25, 2021 |
Cash-like fees (new service fees on gaming / gambling transactions) | 2.5% of the transaction amount | January 25, 2021 |
ChargeLight plan pre-cancellation fees | 5% of the unbilled part of the principal amount | February 1, 2021 |
Check return fees | PHP 1,250 / USD 25 per returned check | February 1, 2021 |
SOA recovery costs | PHP 50 per page if the requested billing statement is three months or more ago | February 1, 2021 |
China Bank Credit Card Fees 2020
Chinese Bank Credit Card Fee | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Monthly installment premium rate | N / A | N / A |
Cash advance fees | N / A | N / A |
UnionBank Credit Card Fees 2020
UnionBank Credit Card Fees | New rates | Effective date |
|---|---|---|
Minimum amount due | PHP 400 or 4% of total balance, whichever is greater | November 15, 2020 |
Monthly interest rate | No update yet | N / A |
Monthly installment premium rate | No update yet | N / A |
Cash advance fees | No update yet | N / A |
EastWest Credit Card Fees 2020 to 2021
EastWest Credit Card Fees | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Interest rate on cash advances | 2% | November 3, 2020 |
Cash advance fees | 200 PHP per transaction | November 3, 2020 |
Minimum amount due | PHP 200 or the sum of 3% of the total balance + overdue amount + over limit amount, whichever is greater | January 15, 2021 |
Citibank Credit Card Fees 2020 to 2021
Citibank Credit Card Fees | New rates | Effective date |
|---|---|---|
Citi Balance Transfer and Speed Cash processing fees | PHP 900 per approved transaction | October 30, 2020 |
Citi FlexiBill Processing Fee | PHP 750 per approved transaction | October 30, 2020 |
Citi PayLite processing fees | PHP 250 per approved post-purchase transaction | October 30, 2020 |
Monthly interest rate | 2% | November 3, 2020 |
Interest rate on cash advances | 2.04% (including PHP 200 cash advance fee) | November 3, 2020 |
Late fees (not applicable to Citi Simplicity +) | PHP 1,500 or the minimum amount outstanding, whichever is lower | January 8, 2021 |
Over Limit Fee (not applicable to Citi Simplicity +) | PHP 1,500 or the greater over limit amount during the billing period, whichever is less | January 8, 2021 |
HSBC Credit Card Fees 2020
HSBC Credit Card Fees | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Interest rate on cash advances | 2% | November 3, 2020 |
Cash advance fees | 200 PHP per transaction | November 3, 2020 |
HSBC Card Balance Transfer, Cash Remittance and Card Balance Conversion Fees | 1% monthly supplement | November 3, 2020 |
Maybank Credit Card Fees 2020
Maybank Credit Card Fees | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Cash advance fees | 200 PHP per transaction | November 3, 2020 |
Bank of Commerce 2020 Credit Card Fees
Bank of Commerce Credit Card Fee | New rates | Effective date |
|---|---|---|
Monthly interest rate | 2% | November 3, 2020 |
Cash advance fees | 200 PHP per transaction | November 3, 2020 |
Balance transfer, installment conversion, balance conversion, back-to-school and cash transfer fees | Maximum of 1% monthly premium rate | November 3, 2020 |
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Final thoughts
The cap on credit card interest rates and other fees is of great help to cardholders in the Philippines during these difficult times. It will allow you to pay off your credit card quickly and borrow money using your card at a cheaper cost in the event of a financial emergency.
To get the most of these benefits of a lower credit card interest rate, maintain your good creditworthiness – avoid maximizing your credit limit, pay your bills in full and on time, and use your card responsibly. .
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