Credit Card Interest Rate Cap and Other Updated Fees in 2020

Venus Zoleta
·8 min read
Credit Card Interest Rate Cap and Other Fees | Moneymax
Credit Card Interest Rate Cap and Other Fees | Moneymax

Now here’s a great reason for you to get a credit card. Banks will soon start charging lower credit card interest rates and other fees. This comes after the Bangko Sentral ng Pilipinas (BSP) imposed limits on credit card charges in keeping with its all-time low policy rate[1] amid the COVID-19 crisis.

Coupled with the 60-day moratorium on loan payments under the Bayanihan to Recover As One Act, the cap on credit card interest rates and fees will give Filipinos reprieve from financial difficulties during the pandemic. If you’re an existing cardholder, it’s a good opportunity to pay down your credit card debt.

Whether you are applying for a new credit card or currently have one, here’s what you should know about the newly imposed restrictions on credit card interest rates in the Philippines.

What is the Cap on Credit Card Interest Rates and Fees?

credit card interest rate in the philippines
credit card interest rate in the philippines

The BSP has issued Circular No. 1098[2] that sets the maximum credit card interest rates and fees in the Philippines. All BSP-regulated banks are mandated to implement the new rates starting November 3, 2020.

The cap on credit card interest rates and other fees will be reviewed by the BSP every six months. So expect that the figures might change depending on the country’s current economic condition.

2% Credit Card Interest Rate Cap

Under the BSP Circular, credit card providers can charge only up to 2% monthly finance charge (or 24% annual interest rate) on the cardholder’s unpaid outstanding balance. The credit card interest rate cap applies to straight payments and cash advances.

Previously, the average interest rate of credit cards in the Philippines was 3.50% per month or 42% per year. With the new BSP-imposed limit, credit card interest rates have decreased by around 1.50 percentage points monthly or 18 percentage points yearly.

In addition to lowering their credit card interest rate to 2%, banks are also required to share with their clients a detailed yet simple, easy-to-understand explanation of how they compute their fees and charges.

1% Credit Card Installment Rate Cap

A separate credit card interest rate cap will be charged on installment plans, including balance transfer and balance conversion. For such installment payments, banks can charge only up to 1% monthly add-on rate.

P200 Credit Card Cash Advance Fee Cap

When you make a cash advance on or after November 3, you’ll be charged a fixed fee of only up to PHP 200 per transaction. According to the BSP, no other charges should be collected on credit card cash advances except for that flat fee.

Related article: 12 Credit Card Fees in the Philippines to Watch Out For

Updated Credit Card Interest Rate Philippines

redit card interest rate and other fees
redit card interest rate and other fees

Complying with the BSP-mandated cap on credit card interest rates and other fees, 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 lower than the ceiling rates. Some credit card providers increased their late payment and overlimit fees, apparently to offset lost opportunity costs due to the compulsory lower interest rates.

Below are the updated credit card interest rate and fee tables of banks in the Philippines, at least for 2020 to 2021. Credit card fees that are not included in the tables remain the same.

BPI Credit Card Fees 2020

BPI Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Special Installment Plan (SIP) and SIP Loan variants with add-on rates

1% monthly add-on rate

November 3, 2020

Cash advance interest rate

2%

November 3, 2020

Cash advance fee

PHP 200 per transaction

November 3, 2020

Metrobank Credit Card Fees 2020

Metrobank Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Balance Transfer, Cash2Go, and Balance Conversion fees

1% monthly add-on rate

November 3, 2020

Cash advance fee

PHP 200 per transaction

November 3, 2020

Security Bank Credit Card Fees 2020 to 2021

Security Bank Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Balance Transfer, Ready Cash, Balance Convert, Convert to ChargeLight, and SimplyPay

1% monthly add-on rate across all tenors

November 3, 2020

Cash advance fee

PHP 200 per transaction (Peso accounts) / USD 4 per transaction (Dollar accounts)

November 3, 2020

Late payment fee

1.5% of the total amount due

January 25, 2021

Minimum amount due

PHP 500 or 3% of the total amount due, whichever is higher (Peso accounts) / USD 10 or 3% of the total amount due, whichever is higher (Dollar accounts)

January 25, 2021

Quasi-cash fee (new service fee on gaming/gambling transactions)

2.5% of the transacted amount

January 25, 2021

ChargeLight Plan pre-termination fee

5% of the unbilled portion of the principal amount

February 1, 2021

Returned check fee

PHP 1,250 / USD 25 per returned check

February 1, 2021

SOA retrieval fee

PHP 50 per page if requested billing statement is from three months or more ago

February 1, 2021

China Bank Credit Card Fees 2020

China Bank Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Installment monthly add-on rate

N/A

N/A

Cash advance fee

N/A

N/A

UnionBank Credit Card Fees 2020

UnionBank Credit Card Fees

New Rates

Effectivity Date

Minimum amount due

PHP 400 or 4% of the total balance, whichever is higher

November 15, 2020

Monthly interest rate

No update yet

N/A

Installment monthly add-on rate

No update yet

N/A

Cash advance fee

No update yet

N/A

EastWest Credit Card Fees 2020 to 2021

EastWest Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Cash advance interest rate

2%

November 3, 2020

Cash advance fee

PHP 200 per transaction

November 3, 2020

Minimum amount due

PHP 200 or the sum of 3% of total balance + overdue amount + overlimit amount, whichever is higher

January 15, 2021

Citibank Credit Card Fees 2020 to 2021

Citibank Credit Card Fees

New Rates

Effectivity 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 fee

PHP 250 per approved after-purchase transaction

October 30, 2020

Monthly interest rate

2%

November 3, 2020

Cash advance interest rate

2.04% (inclusive of PHP 200 cash advance fee)

November 3, 2020

Late payment fee (not applicable to Citi Simplicity+)

PHP 1,500 or the unpaid minimum amount due, whichever is lower

January 8, 2021

Overlimit fee (not applicable to Citi Simplicity+)

PHP 1,500 or the highest overlimit amount during the billing period, whichever is lower

January 8, 2021

HSBC Credit Card Fees 2020

HSBC Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Cash advance interest rate

2%

November 3, 2020

Cash advance fee

PHP 200 per transaction

November 3, 2020

HSBC Card Balance Transfer, Cash Instalment, and Card Balance Conversion fees

1% monthly add-on rate

November 3, 2020

Maybank Credit Card Fees 2020

Maybank Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Cash advance fee

PHP 200 per transaction

November 3, 2020

Bank of Commerce Credit Card Fees 2020

Bank of Commerce Credit Card Fees

New Rates

Effectivity Date

Monthly interest rate

2%

November 3, 2020

Cash advance fee

PHP 200 per transaction

November 3, 2020

Balance Transfer, Convert to Installment, Balance Convert, Back to School, and Cash Installment fees

Maximum of 1% monthly add-on rate

November 3, 2020

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Final Thoughts

The cap on credit card interest rates and other fees is a big help for cardholders in the Philippines during this difficult time. It will enable you to pay off your credit card fast and borrow cash using your card at a cheaper cost for a financial emergency.

To get the most out of such benefits of a lower credit card interest rate, maintain your good credit standing—avoid maxing out your credit limit, pay your bills in full and on time, and use your card responsibly.

Enjoy no annual fees on your credit card!
Enjoy no annual fees on your credit card!

Sources:

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