Legislator seeks to outlaw high credit card interest rates

A LAWMAKER recently filed a bill to impose a ceiling interest rates and penalties on the credit card interest following the huge number of credit card users in the country.

Rep. Arthur Yap of Bohol filed House Bill 1235, which seeks to limit the imposition of credit card interest rate to 1 percent a month, or 12 percent annually, and 1 percent penalty charge a month, or 12 percent annually.

Any credit card provider, who shall be found guilty of violating any of the offenses provided under the Act, shall be imprisoned for a period of six years and shall be slapped with a fine of P500,000 and suspension or revocation of their business permit.

He also proposed that any imposition of credit card interest rates and penalties higher than the prescribed limits would be considered as a criminal act.

He cited a recent news article stating that some four million Filipinos are now holding around 6 and half million credit cards whose number approximates about five percent of the entire population.

“Due to the aggressive marketing of credit card companies, this number is expected to rise in the very near future because consumers are being constantly wooed by promos and other marketing gimmicks, to avail and use their credit cards for their everyday purchases,” Yap said.

He also expressed disappointment that a big percentage of these credit card holders do not possess the discipline in the use of their credits. According to him, the credit cards are being used as an extension of cash or money, which they presently do not have instead of being mere cash substitutes.

“It is saddening that these people, who are mostly fixed income earners with no additional money or provisioning for debt servicing, end up in debt.  With the credit card companies imposition of very prohibitive, exorbitant and unconscionable interest rates, penalty and other finance charges, these credit card users dig themselves a grave of debt,” Yap said. –Ruben D. Manahan 4th, Manila Times