BSP keeps credit card fee cap at 24% per year

BSP building

Bangko Sentral of the Philippines. (File Photo/Philippine Daily Inquirer)

The Bangko Sentral ng Pilipinas (BSP) decided to maintain interest rate caps on credit card transactions, citing the “reasonableness” of current fees even with accelerating inflation.

With this, the maximum interest rate or finance charge for unpaid credit card balances is still 2% per month or 24% per annum, as stipulated in Circular No. 1098 of September 24, 2020, which provides details of fees charged by banks. and other issuers to credit card users.

Meanwhile, the maximum additional fee for installment loans is 1% per month, while transaction fees for credit card cash advances are capped at P200 per transaction.

“The reasonableness of the caps will be subject to further review in January 2023,” the BSP said, adding that it will continue to closely monitor domestic and external developments that impact credit card funding. , the sustainability of credit card operations and the viability of banks. and credit card issuers.

The country’s inflation accelerated to its fastest pace in nearly 14 years in October, with the rate rising further even as the central bank struggles to temper its rise.

The consumer price index rose 7.7% in October from a year ago – the fastest rise since December 2008 – thanks to higher prices for major commodity groups, especially food and non-alcoholic beverages.

On November 17, the BSP is expected to announce a rate hike of 0.75 percentage points, matching that of the US Federal Reserve, bringing it to 5%.

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