BSP counsels credit card holders

By Sally Atento-Altea LEGAZPI CITY --- With the great purchasing power of a credit card, comes the cardholder’s greater responsibility to pay his bill. Rochelle Tomas of Bangko Sentral ng Pilipinas (BSP) Legazpi Branch stressed this during a seminar held by the BSP branch to mark the agency’s 25th anniversary. “Why do credit cards come with high charges? Because it’s as if they are advancing payment for you. Money has costs,” said Tomas, the acting deputy director of the BSP financial consumer protection department during the Learning Session on Credit Cards and Interest Rates. Tomas said credit cardholders have the responsibility to comply with the terms like paying their bills on time or in full. “Know how to be responsible credit card users,” Thomas said. “Understand first what a credit card is. Assess your capacity to pay and know how to comply with the terms.” Thomas noted that in the Philippines more than eight million credit cards are released by 23 providers, mostly banks. She added that 80 percent of complaints referred to BSP involved credit cards, 90 percent of which affects financial charges and collections. Thomas stressed the need to carefully understand the terms and conditions before using a credit card since most cardholders who do not read the conditions governing its use encounter problems afterward. “Failure to understand the terms, offers and statements can lead to deep debt,” she said. Acting Deputy Director Rachel Thomas of the Bangko Sentral ng Pilipinas (BSP) financial consumer protection department talks to cardholders. On the part of the credit card issuer, the terms especially the fees and interest methods must be clearly disclosed to enable cardholders to come up with informed decisions. Credit card fees may include the annual fee or the payment for using the card, late payment fee for failure to pay at least the minimum amount due, cash advance fee charged each time the card is used to withdraw cash and over-limit fee charged for exceeding approved credit limit on the cut-off date. “Paying less than the amount due could entail higher fees and interests,” Thomas said. However, interest–free credit can be enjoyed with a credit card if the total amount due is paid in full on or before the payment due date for a particular billing cycle. Bills should also be paid on or before the due date to avoid late payment. Likewise, cash advance must be avoided if at all possible since it comes with high fees and charges. “Credit cards usually come with higher charges since the fees and interests are compounded,” she said. As protection from credit card fraud, cardholders are advised not to give out the account number over the phone unless they know that the company is reputable. They are likewise warned against responding to e-mails requesting for credit card details and asking to enter information on a non-secured website. In case of lost or stolen credit cards, call the 24-hour hotline of the issuer immediately. A card replacement fee may be charged for lost, stolen or damaged card. Thus, cardholders need to exercise extreme care in using their credit cards.