General Policy on Credit Card Operations
- BSP promotes fair, transparent, and competitive consumer credit practices
- Rules govern all bank credit card issuers, acquirers, and transactions
Key Definitions
- Credit card and virtual equivalents
- Terms such as minimum amount due, default/delinquency, acceleration clause, simple annual rate, and others defined
- Definitions cover credit card issuers, acquirers, cardholders, billing cycle, finance charges, installments, fees, and supplementary cards
Requirements to Operate as Bank Credit Card Issuer
- Banks must notify BSP and certify compliance with risk management standards
- Commencement of operations must occur within six months after notification
Governance and Risk Management for Card Operations
- Banks must maintain adequate financial strength and capable management
- Risk governance framework to identify, monitor, and mitigate risks
- Coverage includes operational limits, organizational setup, risk assessment, and internal audits
Issuance of Credit Cards
- Pre-approved cards are prohibited
- Know-Your-Customer (KYC) and credit underwriting required
- Verification of applicant information mandatory
Mandatory Disclosures to Cardholders
- Finance charges, fees, interest rates, payment schedules, penalties enumerated
- Details on currency conversion, late payment penalties, and account reminders required
- Changes must be notified 90 days prior, with cardholder right to terminate account
- Disclosure format must be clear and accessible
Interest Computation
- Interest only charged on unpaid outstanding balances as of statement cut-off date
- Excludes current cycle purchases and zero-interest deferred payments
- Continuous interest accrual until full payment received
Payment Due Date Rules
- Payment due date must be consistent regardless of payment mode
- Due dates falling on weekends or holidays moved to next business day without penalty
Deferral Charges
- Banks and cardholders may agree to defer unpaid installments with disclosed charges
Late Payment Fees
- Fees only collectible if disclosed in contract
- Calculated based on unpaid minimum amount or fixed amount, or total balance if acceleration clause applies
Confidentiality of Cardholder Information
- Strict confidentiality, with exceptions including court orders, consent, anti-fraud, and credit bureaus
- Recipients of info bound to confidentiality
- Compliance with data privacy laws mandated
Suspension, Termination, and Reactivation of Cards
- Banks must set criteria and notify cardholders of suspensions or terminations
- Cardholders can terminate accounts subject to payment or repayment arrangements
- Right to appeal suspensions or cancellations
Credit Limit and Over-the-Limit Transactions
- Credit limits based on creditworthiness
- Cardholders notified of changes and can decline increases
- Over-the-limit transactions at bank discretion with clear fee disclosure
Offset Rights
- Banks may offset cardholder debts against deposits per Philippine Civil Code
Customer Complaint Handling
- Consumer Assistance Units required
- Procedures defined for billing errors and lost/stolen cards
- Banks must investigate and resolve within specified time frames
Collection Practices and Third-Party Agents
- Reasonable and legal collection methods mandated
- Outsourcing subject to BSP regulations
- Prohibited acts include harassment, falsehoods, threats, and unreasonable hours
- Notification of collection agency endorsement required
Application of Payments to Card Balances
- Payments above minimum applied first to fees, then balances by descending interest rate
- Promotional rates used as basis for payment hierarchy
Merchant Due Diligence
- Merchants required to verify cardholder identity per service level agreements
- Banks may confirm suspicious transactions with cardholders
Sanctions and Penalties
- Enforcement actions and monetary penalties for violations
- Possible suspension or cancellation of credit card issuer authority
- Specific penalties for operating without notification or non-compliance with regulations
Reporting Requirements
- Monthly quantitative reports on credit card issuance, usage, complaints, and cardholder profiles
Voluntary Cessation of Business
- Banks must notify BSP and submit cessation plan upon deciding to exit credit card business
Transition Provisions
- Transitional periods allowed for compliance with interest computation, payment recognition, due date rules, and late fees
Cross-References and Effectivity
- Renumbering of related provisions and cross-reference adjustments made
- Circular effective 15 days post-publication