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FOURTEENTH CONGRESS OF THE REPUBLIC) 
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OF THE PHILIPPINES 
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First Regular Session 
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SENATE 
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S.B.NO. 1259 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
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.' 
' This bill was originally filed during the Thirteenth Congress, First Regular Session. 


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FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
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First Regular Session 
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SENATE 
S.B.No. 1259 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
REQUIRING CREDIT CARD CORPORATI0N.S TO GIVE THEIR CONSUMERS NINETY 
DAYS NOTICE BEFORE CHANGING THEIR ANNUAL CREDIT PERCENTAGE RATE OF 
INTEREST APPLICABLE ON ANY CREDIT CARD ACCOUNT OR BEFORE CHANGING 
THE INDEX USED TO DETERMINE SUCH RATE 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assem bled: 
SECTION 1. Short Title. - This Act shall be known as the "Credit Card Interest Rate 
Change Disclosure Act." 
SECTION 2. Declaration of Policy. - The State shall simplify, clarify and modernize the 
laws governing credit transactions and encourage the development of fair and economically 
sound consumer credit practices. The State shall assure the full disclosure of the true cost of 
credit to protect the consumer from lack of awareness of the true cost of credit to the user. 
SECTION 3. Definition of Terms. - As used in this Act, the term: 
(A) "Credit Card" means any card, plate, coupon book or other credit card device 
existing for the purpose of obtaining money, property, labor or services on credit; 
and 
(B) "Open-End-Credit Plan" means a consumer credit extended on an account pursuant 
to a plan under which: 
(1) The creditor may permit the person to make purchases or obtain loans, from 
time to time, directly from the creditor or indirectly by the use of credit card, 
check or other device; 
(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 
outstanding unpaid balance. 
SECTION 4. Advance Notice of Increase in Interest Required. - In the case of any credit 
card account under an open-end-credit plan, no increase in any annual percentage rate of interest 
other than an increase dues solely to a change in another rate of interest to which such rate is 
indexed or an increase due to the expiration of any introductory percentage rate of interest 
applicable to any outstanding balance of credit under such plan; and no change in the index used 
to determine any such annual percentage rate of interest, may take effect before the end of the 
ninety (90) day period beginning on the date of notice of such increase or change in index is first 
provided to the consumer. 
SECTION 5. Freeze on Interest Rate Terms and Fees on Canceled Cards. - 
(A) Increase Not Effective for Canceled Accounts. - If, after receiving a notice pursuant 
to Section 3 with respect to any credit card account under an open-end-credit plan, a consumer 
cancels the credit card account before the end of the ninety (90) day period referred to in such 
Section-- 
(1) An annual percentage rate of interest applicable after the cancellation with 
respect to the outstanding balance on such account as of the date of 
cancellation may not exceed any annual percentage rate or interest applicable 
with respect to such balance under the terms and conditions in effect before 
the cancellation; and 
(2) The repayment of such outstanding balance after the cancellation shall be 
subject to all other terms and conditions applicable with respect to such 
account before the cancellation. 
(B) Notice of Right to Cancel. - The notice referred to in Section 3 with respect to an 
increase in any annual percentage rate of interest or my change in an index shall be made in a 
clear and conspicuous manner and shall contain a brief statement of the right of the consumer- 
(1) To cancel the account before the effective date of the increase or change in 
index; and 
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(2) After such cancellation, to pay any balance outstanding on such account at the 
time of the cancellation in accordance with the terms and conditions in effect 
before the cancellation. 
SECTION 6. Penalties. - Any creditor who in connection with any credit card 
transaction fails to disclose to any person any information in violation of this Act shall be liable 
to such person in the amount of One Thousand pesos (P1,OOO.OO) or in the amount equal to twice 
the finance charge required by the creditor in connection with such transaction, whichever is 
greater. Action to recover such penalty may be brought by such person within one (1) year from 
the date of the occurrence of the violation in any court of competent jurisdiction. 
SECTION 7. Separability Clause. - If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law of the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 8. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent 
with, the provisions of this Act is hereby repealed, modified or amended accordingly. 
SECTION 9. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved, 
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