Bangko Sentral retains credit card fees, interest rate cap at 3% a month

This means that any credit card user, regardless of bank, will only be charged a maximum interest of 3% every month on their unpaid balance

MANILA, Philippines – If you’ve been relying on your credit card recently, you’ll be glad to know that the maximum rate for monthly interest, charge for installment loans, and cash advance fee for credit cards will all be maintained.

Here are the ceilings on credit card transactions set by the Bangko Sentral ng Pilipinas , which will remain for the next six months:Maximum add-on rate for installment loans – 1% per monthEssentially, this means that any credit card user, regardless of bank, will only be charged a maximum interest of 3% every month on their unpaid balance.

“The BSP’s decision to maintain the current ceilings on credit card transactions strikes a balance between providing consumers with access to credit card financing at steady rates and ensuring long-term viability of banks/credit card issuers so that they can continue to provide quality service to their clients,” said BSP Governor Eli Remolona Jr. in a statement on Tuesday, August 22.

The cap on maximum interest rates served to ease the burden on consumers in need of access to credit during the pandemic. With the economy reopening, the BSP hadAs of May 2023, credit card receivables continued to grow at a strong 29% year-on-year, higher than the 17.1% recorded in the same period in 2022.

Despite the increase in use, credit card issuers have managed to keep the quality of their portfolios, with the non-performing loan ratio for credit card receivables improving to 3.9% as of May 2023 compared to 6.3% last year.

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