BSP retains 3% credit card charge cap

The Bangko Sentral ng Pilipinas (BSP) has retained the 3-percent monthly cap on credit card finance charges while allowing higher fees for installment loans and cash advances, giving card issuers greater flexibility amid rising operating costs.

In a statement last week, the central bank said the monthly add-on rate ceiling for credit card installment loans will increase to 1.5 percent from the current 1 percent.

The maximum one-time processing fee for cash advances will also go up to ₱300 from ₱200.

The adjustments are covered by BSP Circular No. 1242, issued on Nov. 10. The circular will take effect 15 calendar days after its publication in either the Official Gazette or a newspaper of general circulation.

The revised ceilings will apply only to new transactions beginning on the circular’s effectivity date. Existing credit card installment loans will remain subject to the terms and conditions agreed upon when they were entered into.

The BSP said the changes seek to maintain consumer protection while giving credit card issuers more room to set charges as their operating expenses increase.

The central bank first introduced ceilings on credit card fees and charges in 2020, with partial adjustments made in 2023.

“The BSP regularly reviews the caps on credit card fees and charges. It takes into account overall economic conditions, the soundness of banks and other financial institutions, and consistency with the BSP’s monetary policy settings, among other factors,” the BSP said.