Bill seeks limit on credit card interest rates

CREDIT CARDHOLDERS should keep track of the progress of House Bill 1235. Filed by Rep. Arthur Yap, who is on his first term as representative of the 3rd district of Bohol, the bill, if enacted into law, sets a limit on monthly interest for credit card payments to one percent, or 12 percent per annum.

Similarly, penalty charges will also be limited to one percent per month or 12 percent per annum. Any violation will be considered a criminal offense.

While Yap acknowledged that many credit cardholders do not have the discipline to use their cards wisely, the congressman was quoted in newspaper reports as saying credit card issuers imposed “very prohibitive, exorbitant and unconscionable interest rates, penalty and other finance charges.”

Yap explained the urgency of his bill by pointing out that 4 million Filipinos today hold 6.5 million credit cards. He said the number could increase significantly “due to the aggressive marketing of credit card companies that constantly woo customers with promos and other marketing gimmicks.

If passed, Yap’s bill will be known as the “Credit Card Users Protection Act of 2010.” Penalties for violation include imprisonment, a fine of P500,000, and suspension or revocation of business permits. -Linda B. Bolido, Philippine Daily Inquirer