I 
First Regular Session 
'The nineties have witnessed the phenom&nal growth of credit cards in the Philippines. tlnnks 
-e. 
.- 
2nd other financial institutions have included credit cards in their wide arrayef financial services. 
Ho\vever, there is no specific l a w  regulating the solicitation of applications of credit cards and 
the imposition. of interest and penalty charges. Many card holdershave been victims of being 
' .harped 
nrith additional int'cichsjand peniilties, or both, because of their ignorance on the application 
1 
I 
I .  
I 
. 
', 
'
I
 
, I  !: 
j 
' (  
i 
j
,
I
j
 
: 
. .  
, ,  
, 
. ;' 
, , ! :I 
* .:: 
. ,  
, 
, ' I , !  " ' ! 
i 
, 
I 
., 
! 
.
.
 


THIRTEENTH CONGRESS OF THE REPUBLIC) 1 
OF THE PHILlPPmS 
AN ACT 
TO PROL'IDE FOR MORE DETAILED AND UNIFORM DISCLOSURE BY CREDIT AND 
CH.ARGE C.4RD ISSUERS WITH RESPECT TO INFORMATION RELATING TO 
IXTEREST KATES AND OTHER FEES WHICH MAY BE INCURRED BY CONSUMERS 
THROUGH 'THE USE OF ANY CREDIT OR CHARGE CARD. 
note oild /he f1oirse of Representatives of the Philippines in i~origrc.~.~ 
II 
li 
Section I .  
Disclosure ACI <Ii 
Short Title. 
This Act may.& cited as the "Fair Credit and Charge Card 
It is the policy ofthe state to protect the rights 
* 
I 
L .& 
Seciion 2. 
Declaration of Policy. 
of consumers by providing for the disclosure by credit and charge card issuers of information relating 
IC> inreren rates? penalties, fines ahd other fees which may be incurred through the use of any credit 
or charge card. 
1 
. .  
\ 
i 
\ 
1 'i 
Section 3. 
Definition of Terms. For purposes of this Act, the term: 
a) "Charge Card means a card, plate or other single credit device that may be'used 
froin rime to rime to obtain credit. 
b) "Credit card" means any card, plate, coupon book or other credit device existing 
for rhc purpose of obtaining money, property, labor or services on credit. 
c) "Open-end-credit plan" inems a consumer credit extended on an account purr;tlant 
j. 
[he creditop,may permit the person I to make purchases or obtain loans, from 
1; 
to a plan under which: 1 4 l a  
il 
time to time, direcily from the creditor or indirectly hy use ofcredit card, check dr 
orher device: 


. .  . 
'
/
,
 . 
,,, 
iii) 
a finance c 
e may be computed by the creditor from timi to time on an 
outstanding unpaid dalance. 
d) 
"Board" means the MonetatyBoard. 
e) "Penalty Charge>' means such amo,pnt of interest imposed on the credit card 
1 
I 
holder for non-payment of anaccount within a prescribed period. 
ti 
1 
I' 
; {  
Smion 1. Direct h a i l  Abplication and Solicitation. Any application to open a credit 
card accouni for any person undeti an open end credit plan or a solicitation to open such an 
i 
1 i 
account shall disclose the following information: 
.4) Annual Percentage Rate. 
i J  
Each annual percentage rate applicable to extensions of credit under such 
credit plan. \\'here an extension of' credit is subject to a variable rate, the %ct that the rate is 
*. ariable. ,the annual percentage rate in effect at the t h e  o f t  e mailing, and how the rate is 
I 
'i 
! 
determined. 
i 
ii) 
Where more I \ an one rate applies, the range ofbalances for more than each 
r m  applies. 
B) Annual and Other Feel. 
i 
. ,  
i) Any annual fee, other periodic fee, or membership fee imposed for the issuance 
, c*r availability of a credit card; including any account maintenance fee or any other charge 
imposed based on activity or inactivity for the account during the billing cycle. 
iij Any minimum finance charge imposed for each period during which any extension 
ofcredir ikhich is subject to a finance charge is outstanding. 
iii) 
Any t m c t i o n  charge imposed in connection with use of the card to purchase 
roods or ssrvices. 
i 
- 
imposed for the delay in payment of an account 
CJ Grace Period. 
or the period within which any credit extended under such 
services must. be repaid to avoid incurring a finance charge, 
credit plan for purchases of 


i 
I 
1 
S
I
 
\ 
, .  
ii) Ifthe length 
such grace period varies, the card issuer may disclosethe range 
I 
1 
:,f days i:. :tie grace period, the minimum number of days in the grace period, or the average number 
o i  days in the grace period, if the disclosure is identified as such. 
j 
! 
DJ Balance Calculation Method. 
1 
I 
i) The name ofthe balancd calculation method used in determining the balance 
V. hich The finance charge is computed. ifthe method used has been defined by the Board, or a 
derailed explanation of the balance Lalculation method used if the method,has not been so defined. 
ii) In prescribing regulations to cany out this clause, the Board shall define and name 
not more than five (5)' balance calculation methods determined to be the most commonly used 
! 
methods. 
i 
i 
1 
.r" j 
I 
: 
b, 
Section 5 .  Other Inforh 1 
ition. In addition to the information requiredrto be disclosed 
1 
under Seclion 4 of this Article, each application or solicitation to which such section applies shall 
disclose clearly 
,
I
 
n extension of credit in the form of 
cash 
ion with an extension of credit 
d with respect to such amount. 
in excess of the amo 
Section 6. Telepho 
card account for any pets 
solicitation shall orally disclose the information described in Section 4 of this Act. 
In any telephone solicitation to open a credit 
end consumer credit plan, the penson making the 
I 
Section 7. Excepfions. Section 4, shall not apply to any telephone solicitation if, 
P 
A) The credit card issuer- 
I 
i) does not impose any fee in connection with paragraphi (B)(i), Section 
j 
i 


' , , .  
i,. 
I i. 
ii) does not :mpose any fee in connection With telephone solicitations unless 
the consumer signifies acceptance by using the card; 
iii) 
the card issuer discloses clearly and conspicuously in writing the 
infomtjon described in Article I1 within 30 days after the consumer requests the 
card, but in no event later than the date of delivery of the card; and 
ivj ' the card issuer discloses clearly and conspicuously that the consumer 
is not obligated to accept the card or account and the consumer will not be 
obligated to pay any fees or charges disclosed unless the consumer elects to accept 
@+ 
I i 
the card or account by using the card. 
i 
i 
Secrion 8. Applicalions and Solicitation by Other Means. Any application to open a 
c r d / r  card account for any person under an open end consumer credit plan, and any solicitation 
I:J open such an account without requiring an application, that is made available to the public or 
comained 
in catalogs, magazines, or other publications shall meet the following disclosure 
requircrnenrs: 
i" 
..I) 
Specific Informationi An application or solicitation described in this Section meets 
. .  
I 
B, I *# 
rhe requirement of this paragraph f such application or solicitation contairls: 
I 
1 ) the information 
ii) describedm 
i. Section 5 in a clear and conspicuous form 
i i 
f 
) 111 
B J A statement: in a conspicuous and prominent location on the application'or solicitation, 
that. 
i) the irdknation is accurate as of the date the application or solicitation 
I 
I 
\vas printed; 
ii) the information contained in the application or solicitation is subject to. 
4 
change after such.date; 
iii) the applicant should contact th5 creditor for information on any change 
in the information contained in the application or solicitation since it was printed: 


I 
Pli 
D) A disclosure, in ."i a, conspicuous and prominent location on the application or 
iolicitation: of a toll free telephone number or a mailing address at. which the applicant may 
i f  
I 4  
,
>
 
', 
contact the creditor to obtain any change in the information provided in the application or 
salicitation since it was printed. 
1 
- ,  
Section 9. General Information Without Any Specific Term. 
An application or 
iolicitqtim described in Section 8 meets the requirement ofthig section if such application 
.rc- 
A) contains a statement, in a conspicuous prominent location on the application or 
solicitation, that- 
i) there are costs associated with 'the sue of credit cards; and 
ii) the applicant may contact the creditor to request disclosure of specific 
info&tion/of 
such costs by calling a toll free telephone number or by wtiting to 
an address, /specified in the application; 
B )  I' contaijls a disclosure, in a conspicuous and prominent location on the 
application or solicitation,!of a toll free telephone number and a mailing address at which the 
applicant may contact the creditor to obtain such information; and 
i 
I 
I 
I 
i 
i ! 
. .  
C) does not contain any ofthe items described in Section 4 
Section IO. Charge C h d  Applications,and 
, ,  I 
Solicitations. Any application or solicitation 
i 
I O  open a charge card account s L
'
 
all disclose clearly and conspicuously the following information: 
A) Any annual fee, i other periodic fee, or membership fee imposed for the issuance 
i 
I 
or a\-ailabilin. of the charge card, !including any account maintenance fee or other charge imposed 
r
:
 
based on acti\itq. or inactivity fonthe 
I 
account during the ,billing cycle. 
x 
B) Any transaction charge imposed in connection with use of the card to purchase 


I 
<, , 
, .  
., . 
Section 1 I ,  Other information. In addition to the information required to be disclosed 
under Section 10: each written application or solicitation to which such section applies shall 
disclose clearly and conspicuously the following information: 
A )  Cash Advance Fee. Any fee imposed for an extension of credit in the forp of 
cash. 
B) Late Fee. Any fee imposed for a late payment. 
C) Over-The-Limit-Fee. Any fee imposed in connection with an extension of credit 
in excess of the amount of, credit authorized to be extended with respect to such amount. 
.* 
Sccrion 12. Applications and Solicilations by Other Means. An application to open a 
c k q ?  mrd account and any solicitarion to open such account without requiring an application, that 
is made a\.ailahle tn the publi 
r contained in catalogs, magazines, 
,-<r other publications shall contain: 
i 
I 
A) the infonnation- 
i) descrihed in Section 10 
ii) described in Siction 1 1  in a clear and conspicuoris form 
. .  
I 
BJ a statement, io a conspicuous'and prominent location on the ripplication or 
ac\licitation. that 
i) the information is accurate as ofthe date the application or solicitation was 
printed; 
ii) the information contained in the application or Policitation is subject to 
change afrer such date; 
iii) the applicant should contact the creditor for information on any change 
I 
I 
in the information contained in the application or solicitation since it was printed; 
a clear and conspicuous disclosure of the date the application or solicitation was 
printed: an3 
D) a disclosure, in a conspicuous and prominent location on the application or 
.
.
 
. , 
. , ., ., ,. &,I,,:, 
.. 
,.i ii roll free i e l ~ p l ~ ( ~ t ~ c  
iiumker or a inailing address at which the applicant may contact 


*, 
. .  
\ *  
I 
lh2 creditor to obtain any change in the information provided in the application or solicitation since 
it was printed. 
~ 
%tion 13. Issuen of Charge Cards Which Provides Access to Open End Consnrner 
Credit Plans. If a charge card permits the card holder to receive an extension of credit under an 
cpen end consumer credit plan, which is not maintained by the charge card issuer, the charge card 
issuer may pro\,ide the information described in Section 10 and 11 in the form required by such 
wtions in lieu ofthe information required to be provided under Sections 5, 6 and 8 with respect 
I 
. I  
tiJ any credit extended under such plan, if the charge card issuer discloses clearly and 
cmspicuously to the consumer in the application or solicitation that- 
-e 
A) the charge card issuer will make an independent decision as to whether to issue 
the card: 
I 
9) the charge card may arrive before the decision is made with respect to an 
extension of credit under an open end consumer credit pian; a d 1 
I I 
C )  approval by the charge card issuer does not constitute approval by the issuer of 
the extension ofcredit. 
The information required to be disclosed under Section 4 shall be provided to the charge card 
holder, by the creditor which maintains such open end consumer credit plan before the first 
sxrension of credit under such plan. 
,. 
, 
Section 14. 
Rqiilatory Authority of the Board. The Board m y ,  by regulation, require 
th? disclosure of information in addition to that otherwise required by the provisions and modify 
an; disclosure of information required by this Act in any application to open a credit card account 
for an? person under an open end consumer credit plan or any application to open a charge card 
aLcounr for any person, or a solicitation to open any such account without requiring an application, 
if the h a r d  determines that such action is necessary to cany out the purposes of, or prevent 
t ' . a h n \  of any provisions ofrhis Act. 


., 
, 
., 
, 
. .. 
Section 15. Disclosure,Pri,o~.to. 
, 
,, 
, 
. . ~ . . .  
, 
Kenewal.:,Except 
;.:".::. 
as 
: .  provided:& 
~ 
,. 
,
,
 
Section 
. . ,, 
6, a.card issuer 
t h t  imposes any fee described in Section 4 shall'transmit 10 a consumer's credit or charge card 
account a clear and conspicuous disclosure of 
.
.
 
.. 
. , , .  
. 
' .  
li 
A) the date by which, the month by which, or the. billing period at the close of which, 
1 
the account will expire if not renewed 
B)' the information desyibed in Section 4 
01 
Section 10 shaii transmit to n 
consumer at least 30'da$s prior to the scheduled reqewal date ofthe consumer's4xdii or charge 
card account a clear and conspicuous disciosure of- 
- 
C) the date by which, the month by which, cr the billing period at the close of which, 
.a" 
the account \\ill expire if not renewed; 
t i  
D) the information described in subsection (c)( I)(A) or (r)(4)(A)(i) shall transmit to 
-u 
a consumer's credit or charge card account a clear wd conspicuous disclosure of: 
E) the rnctliod by which the consumer may terminate continued credit availability 
under the account. 
Section 16. 
Special Rule for Certain Disclosures. The disclosures required by this 
subsection may be provided- 
,, . 
. . 
, 
, .  
.. 
. 
, .  
.~ 
A )  prior to posting a fce described by Section 4 (B) (i) to the account, or 
$) with the periodic billing statement first disclosing that the fee has been posted 
to the aicofnt 
' 
' 
! 
Section 17. Limitation on Use of Special Rule. Disclosures may be provided under 
Section I6 only if the consumer is given a 30-day period to avoid payment of the fee or to have 
the fee recredited to the account in any case where the consumer does not wish to continue the 
availability of the credit; and 
\ 
Secrion 18. 
Short Term Renewals. The Board may by regulation provide for fewer 
disclosures than are required by this Act in the case of an account which is renewable for a period 
of less illan six. (6) montlis. 
I 


. .  . 
. ,,,. 0 
L 
Section 19. 
Other 
les for Disclosures. 
1.: th.: 
;mount of any fee required to be 
<i 
i '  
dijclosed under this Act is detenkned on the basis of!xrwntage of another amount, the percentage 
used in making such determination and the identificatim of ithe amount against which such 
1 
I 
pycentage is applied shall be disclosed in lieu of the amount of such fee, If a credit or charge card 
issuer does not impose any fed required to be disclose6 under any provision of this Act, such 
I, 
1 
provision shall not range not apply with respect to such issuer. 
I 
a 
Section 30. 
Penalties. 
Any issuer ofacharge card or credit card found viola&p, any 
pro:ision of this Act shall afler dudinotice and hearing, have its license to issue credit card or charge 
card suspeided and shall be imposed a fine ofnot less than One Hundred Thousand Pesos (P100,OOO) 
ria: more than One hlillion Pesos, at he discretion of the Board. 
1 
i; 
i; 
.* 
letter of instruction, 
pro\ isions of this 
order, rule or regulatiox contrary to or inconsistent with, the 
modifled or amended accordingly. 
,. 
If any provision, or part hereof, is held invalid or 
uncomirurional, the remainder of'the law or the provisisn w t  otherwise affected shall remain valid 
and subsisting.. 
F 
Effectivity Clause. This Act shall take effrct fifceen (1 5) days after Its publication 
! ; 
in at kast ttvo 131 newspapers ofgeneral circulation. 
.Approved 
MIRIAM DEFENSOR SANTIAGO