Dead-worried about the credit card debt you haven’t paid off for a long time? Stop stressing out and start dealing with it. You can apply for an amnesty program for credit card debt.
A credit card amnesty program in the Philippines allows cardholders with unpaid balances to settle their debt at a lower interest rate and a longer repayment term. This helps you get back on track with your finances and improve your credit standing.
Banks like Citibank have their own an amnesty program for credit card debt. There’s also a credit card amnesty program in the Philippines that consolidates a cardholder’s debt from different banks.
What Happens to Unpaid Credit Card Debt in the Philippines?
Photo by Katemangostar via Freepik.com
Wondering about what happens if you don’t pay your credit cards
? These things are likely to occur after you fail to settle your credit card balance:
- The bank will give you a written notice to remind you of your unpaid credit card balance.
- The bank will turn over your overdue credit card account to a third-party collection agency. You’ll get calls from a collection agent to convince you to repay your debt.
- Unpaid credit card debt will hurt your credit score, as well as your chances of loan and credit card approval in the future.
Filipinos with unsettled credit card debt won’t get jailed because unpaid debts are regarded only as a civil and not a criminal offense. The Philippine Constitution (Article III Section 20) states that “no person shall be imprisoned for debt.”
So if you keep getting calls with jail threats from collection agents, don’t believe them because they’re prohibited from harassing customers.
What is Credit Card Amnesty Program?
Photo from CCAP Facebook page
In June 2016, the Bangko Sentral ng Pilipinas, member-banks of the Credit Card Association of the Philippines (CCAP), and BDO Unibank, Inc. launched a debt restructuring program
called the Interbank Debt Relief Program (IDRP) to help delinquent credit cardholders settle their overdue accounts.
The IDRP is a repayment plan that consolidates and restructures a person’s credit card debts. This credit card amnesty program in the Philippines offers more affordable monthly amortizations with lower interest rates, longer repayment terms, and a more convenient way to pay off credit card bills. It won’t ruin a cardholder’s credit history
, according to the CCAP.
Features of the Restructured Credit Card Debt
- Low interest rates ranging from 0% to 1.5%
- Long repayment terms ranging from 12 to 16 months (Extended up to 10 years for extreme cases of credit card debt)
- Same interest rates and repayments terms applied to all unpaid credit card accounts
Banks That Provide Credit Card Amnesty in the Philippines
Here are the banks that allow credit card debt restructuring under the IDRP:
- Bank of Commerce
- China Bank
- EastWest Bank
- Equicom Savings Bank
- Security Bank
- Standard Chartered Bank
Who Can Apply for Credit Card Amnesty?
Photo by Katemangostar via Freepik.com
Not all credit cardholders in the Philippines can qualify for credit card debt restructuring. The IDRP is open only to those who meet its strict requirements.
IDRP Eligibility Requirements
- Exclusive to Filipinos only; foreigners can’t avail of the program.
- The applicant has at least one credit card from two of the participating banks.
- Unpaid credit card accounts have existed for at least six months with at least PHP 10,000 outstanding balance per card and total overdue balance of at least PHP 100,000.
- Applicant’s age plus the repayment term of the restructured credit card accounts don’t exceed 65 years.
- A co-maker or guarantor is required if the applicant exceeds the 65 combined age limit, has no income source, or earns an insufficient income to cover the monthly amortization.
- No IDRP application filed in the past six months.
- No irresponsible use, misuse, and abuse of credit card, such as purchases related to gambling, luxury, or extensive travel.
How to Apply for Credit Card Amnesty
Call your issuing bank to apply for credit card debt restructuring under the IDRP. If you have multiple credit cards from different banks, the credit card provider with the highest combined outstanding balance will be the lead bank in processing your credit card amnesty application. A representative from the lead bank will call you to explain the arrangement and process your application.
IDRP Document Requirements
You need to submit these documents when applying for credit card amnesty:
- Accomplished application form
- Valid government ID of the applicant and co-maker (if required)
- Statement of income and expenses
- Proof of income
a. For employed applicants: Payslips for the last three months or income tax return (ITR)
b. For self-employed applicants: Latest ITR or audited financial statement
- Proof of other sources of income
- IDRP Payment Agreement Contract signed by the applicant and co-maker (if applicable)
- Debtor’s consent form, promissory note, or post-dated checks
When you apply for a credit card amnesty under the IDRP, you must declare all your outstanding credit card balances. You can’t apply only for a specific credit card account.
If your application for credit card amnesty is denied, you can apply again after six months. Alternatively, you may contact your credit card issuer to inquire about its bank-specific credit card amnesty program for delinquent accounts.
What Happens After Getting Approved?
Photo by Nuchylee via Freepik.com
When you get an approval for credit card amnesty, you can pay your monthly amortization directly to the issuing bank, other banks, or accredited payment centers.
Also, expect these things to happen:
- All your existing credit card accounts—overdue or not—will be blocked and included in the credit card amnesty program. According to the CCAP, this prevents people from making a cash advance using a credit card to pay off another card.
- All the credit card rewards, rebates, and air miles you’ve earned will be forfeited.
- You can’t apply for a new credit card or loan until you’ve fully repaid your credit card debt.
- Your name will be reported to the CCAP and credit bureaus and kept in their files, which lenders use for credit evaluations and decisions.
If you miss paying for two consecutive months, your credit card amnesty will be canceled and considered in default. The IDRP has a Default One, Default All policy, which means defaulting with one bank will cancel the IDRP arrangement with the other banks. You also can’t apply again for IDRP.
Although an unpaid credit card debt won’t land you in jail, do your best to settle it the soonest time possible for your peace of mind. Avail of the IDRP or the credit card amnesty program of different banks in the Philippines to ease up your debt repayment.