CREDIT card companies were warned Tuesday against mobbing their prospective customers to avail of their services, because not all people have the capacity to pay credit cards.
Rep. Jack Enrile of Cagayan made the statement on Tuesday, saying that the propensity of credit card companies in generously giving and approving credit cards applications in malls, as well as distributing pre-approved cards and all the “enticement” that come with it, are resulting in consumers falling into deep debt.
“It is worrisome that credit card applications are presented at your faces because not everybody has the financial capability to enjoy the convenience of credit card use. They should go slow in terms of [issuing] pre-approved cards and supplemental cards, considering that supplemental cards are even given to students who are unemployed,” he said.
“We should be cognizant of the fact that unsecured debt comes with certain liabilities. When you throw it [credit card applications] into their faces, they may not be properly informed of the responsibilities. They should understand the financial capability of the user [first],” Enrile added.
The lawmaker lamented that a vast majority of credit card users do not really understand what it means to be a credit card user, the extent of their responsibilities, how the fees are structured and whether these charges are legal, how interest rates are computed and what part of the minimum payment are due accounts for interest, among others.
“Their credit card bills keep on increasing because of the interest. As such, many are only paying the interest, not the principal,” Enrile added.
He earlier said that banks are overcharging credit card holders because their interest rates are pegged at 3 percent, which is contrary to Supreme Court rulings on Imperial v Jaucian in 2004, Chua v Timan in 2008 and Macalinao v BPI in 2009.
Despite the High Court rulings, Enrile said that credit card companies continue to charge 3-percent to 3.5-percent interest, or a total of 42 percent a year, which are considered exorbitant by the High Tribunal. —
Llanesca T. Panti, Manila Times
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