Credit Card Interest Rate Cap and Other Updated Fees in 2020
Published: October 28, 2020 | Updated: November 18, 2020 | Posted by: Venus Zoleta | Credit Card
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.
Table of Contents
- What is the Cap on Credit Card Interest Rates and Fees?
- Updated Credit Card Interest Rate Philippines
- BPI Credit Card Fees 2020
- Metrobank Credit Card Fees 2020
- Security Bank Credit Card Fees 2020 to 2021
- China Bank Credit Card Fees 2020
- UnionBank Credit Card Fees 2020
- EastWest Credit Card Fees 2020 to 2021
- Citibank Credit Card Fees 2020 to 2021
- HSBC Credit Card Fees 2020
- Maybank Credit Card Fees 2020
- Bank of Commerce Credit Card Fees 2020
- Final Thoughts
What is the Cap on Credit Card Interest Rates and Fees?
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
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 |
Read more related articles:
- Swipe and Save: 10 Credit Cards with No Interest in the Philippines
- 11 Credit Cards with Low Interest Rate in the Philippines
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.
Sources:
- [1] BSP keeps interest rates at record low of 2.25% (CNN Philippines, 2020)
- [2] BSP Circular No. 1098
- [3] BPI Credit Card Fees Table
- [4] Metrobank Cardholder Advisory on Select Fees and Charges
- [5] FAQ: Updates on Security Bank Credit Card Fees and Charges
- [6] Citi Card Fees and Charges
- [7] HSBC Credit Card Fees and Charges
- [8] Maybank Philippines Credit Card Fees and Charges
- [9] Bank of Commerce Credit Card Advisory: BSP Circular 1098
- All photos from Freepik
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Venus is an experienced personal finance writer with a background in digital marketing, public relations, and journalism. She’s into stock, VUL, and mutual fund investing. Follow Venus on LinkedIn.
