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;SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES· 
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First Regular Session 
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SENATE 
S.No. 1714 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
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SEP 18 P 1\ :03 
Republic Act No. 7394, otherwise known as the Consumer Act, Title 4, Article 141 
provides that before opening an account under an open-end-credit plan, the creditor shall 
disclose, to the extent applicable, the following information: 
a) The conditions under which a finance charge may be imposed, 
including the time period, if any, within which any credit extended may be repaid 
without incurring a finance charge; 
b) The method of determining the balance upon which a finance charge 
may be imposed; 
c) 
The method of determining the amount of the finance charges, 
including any minimum or fixed amount imposed as a financed charge; 
d) Where one or more periodic rates may be used to compute a finance 
charge, each such rate, the range of balances to which it is applicable, and the. 
corresponding simple annual rate; and 
e) The conditions under which the creditor may impose a security lien and 
a description of the goods to which such lien may attach. 
This bill complements the law by requiring a 90-day notice before changing the annual 
percentage rate of interest applicable on any credit card account or before changing the index-
used to determine such rate. It further seeks to freeze the interest rate terms and fees on canceled 
credit card accounts before the 90-day period ends. * 
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• This bill was originally filed during the Thirteenth Congress, First Regular Session. 


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SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. No. 
1714 
Introduced by Senator Miriam Defensor Santiago 
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SEP 18 P4 :03 
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AN ACT 
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REQUIRING CREDIT CARD CORPORATIONS TO GIVE THEIR CONSUMERS NINETY 
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DAYS NOTICE BEFORE CHANGING THEIR ANNUAL CREDIT PERCENTAGE RATE OF 
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INTEREST APPLICABLE ON ANY CREDIT CARD ACCOUNT OR BEFORE CHANGING 
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THE INDEX USED TO DETERMINE SUCH RATE 
Be It enacted by the Senate and House of Representatives.afthe Philippines in Congress· 
assembled: 
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SECTION 1. Short Title. - This Act shall be known as the "Credit Card Interest Rate 
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Change Disclosure Act." 
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SECTION 2. Declaration of Policy. - The State shall simplify, clarify and modernize the 
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laws governing credit transactions and encourage the development of fair and economically 
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sound consumer credit practices. The State shall assure the full disclosure of the true cost of 
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credit to protect the consumer from lack of awareness of the true cost of credit to the user. 
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SECTION 3. Definition of Terms. - As used in this Act, the term: 
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(A) 
"Credit Card" means any card, plate, coupon book or other credit card device 
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existing for the purpose of obtaining money, property, labor or services on credit; and 
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(B) 
"Open-End-Credit Plan" means a consumer credit extended on an account 
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pursuant to a plan under which: 
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(l) The creditor may permit the person to make purchases or obtain loans, from 
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time to time, directly from the creditor or indirectly by the use of credit card, 
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check or other device; 
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(2) The person has the privilege of paying the balance; 
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(3) A finance charge may be computed by the creditor from time to time on an 
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outstanding unpaid balance. 
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SECTION 4. Advance Notice of Increase in Interest Required. - In the case of any credit 
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card account under an open-end-credit plan, no increase in any annual percentage rate of interest 
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other than an increase dues solely to a change in another rate of interest to which such rate is 
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indexed or an increase due to the expiration of any introductory percentage rate of interest 
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applicable to any outstanding balance of credit under such plan; and no change in the index used 
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to determine any such annual percentage rate of interest, may take effect before the end of the 
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ninety (90) day period beginning on the date of notice of such increase or change in index is first 
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provided to the consumer. 
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SECTION 5. Freeze on Interest Rate Terms and Fees on Canceled Cards. -
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(A) 
Increase Not Effective for Canceled Accounts. -
If, after receiving a notice 
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pursuant to Section 3 with respect to any credit card account under an open-end-credit plan, a 
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consumer cancels the credit card account before the end of the ninety (90) day period referred to 
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in such Section--
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(1) An annual percentage rate of interest applicable after the cancellation with' 
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respect to the outstanding balance on such account as of the date of 
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cancellation may not exceed any annual percentage rate or interest applicable 
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with respect to such balance under the terms and conditions in effect before 
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the cancellation; and 
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(2) The repayment of such outstanding balance after the cancellation shall be 
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subject to all other terms and conditions applicable with respect to such 
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account before the cancellation. 
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(B) 
Notice of Right to Cancel. - The notice referred to in Section 3 with respect to an 
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increase in any annual percentage rate of interest or any change in an index shall be made in a 
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clear and conspicuous manner and shall contain a brief statement of the right of the consumer-
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(1) To cancel the account before the effective date of the increase or change in 
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index; and 
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(2) After such cancellation, to pay any balance outstanding on such account at the 
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time of the cancellation in accordance with the terms and conditions in effect 
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before the cancellation. 
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SECTION 6. Penalties. -
Any creditor who in cormection with any' credit card-
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transaction fails to disclose to any person any information in violation of this Act shall be liable 
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to such person in the amount of Ten Thousand Pesos (PI0,OOO.OO), or in the amount equal to 
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twice the finance charge required by the creditor in connection with such transaction, whichever 
lOis greater. Action to recover such penalty may be brought by such person within one (1) year 
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from the date of the occurrence of the violation in the court of competent jurisdiction. 
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SECTION 7. Separability Clause. - If any provision or part thereof is held invalid or 
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unconstitutional, the remainder of the law of the provision not otherwise affected shall remain 
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valid and subsisting. 
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SECTION 8. Repealing Clause. - Any law, presidential decree or issuance, executive 
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order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent 
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with the provisions of this Act is hereby repealed, modified, or amended accordingly. 
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SECTION 9. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
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