FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First negulllY Session 
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SENATE 
S. B. No. 166 
Introduced by Senator FRANCIS G. ESCUDERO 
EXPLANATORY NOTE 
The credit card is a very useful tool. It frees us from the need to bring cash, thus 
bringing convenience and security to its users. 
First time credit card holders are prone to the dangers of overspending. Once 
they receive their first bill, they become shocked and realize that they have been buried 
under the avalanche of tremendous interest and surcharges. 
The repeal of the usury law is not a license for persons to charge prohibitive 
interest rates. Thus, the State has to come in to regulate the interest rates charged by 
credit card companies so that a healthier economic environment will prevail for the 
benefit of the credit card holder and the credit card company. 
FRANCIS G. ESCUDERO 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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SENATE 
S. B. No. 166 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
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GOVERNING CREDIT CARD AND OTHER ACCESS DEVICE TRANSACTIONS 
AND PROVIDING PENALTIES THEREFOR. 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Title. - This Act shall be known as the "Credit Card and Other 
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Access Device Act". 
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SEC. 2. 
The State shall simplify, clarify and modernize the laws governing 
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credit transactions and encourage the development of fair and economically sound 
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consumer credit practices. The State shall promote the general welfare of the people by 
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protecting the privacy of consumers in commercial transactions involving the use of 
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credit cards. The State shall assure the full disclosure of the true cost of cre~it to protect 
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the consumer from lack of awareness of the true cost of credit to the user. The State shall 
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protect the economic interest of the people by assuring that only reasonable interest 
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rates and surcharges will be imposed on credit card transactions, as well as prohibit 
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hidden charges on credit card transactions. 
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SEC. 3. 
(A.) 
, (B.) 
Definition a/Terms. - As used in this Act, the term: 
"Credit Card" means any instrument or device, whether known as 
a credit card, credit plate, coupon book or other card device issued 
with or without fee by an issuer, existing for the purpose of 
obtaining money, property, labor, services, or anything of value on 
credit. It shall not include a check guarantee card. 
"Open-End-Credit Plan" means a consumer credit extended to an 
account pursuant to a plan under which: 
(1) 
The creditor may permit the cardholder to make purchases 
or obtain loans, from time to time, directly from the creditor 
or indirectly by the use of credit card; 
(2) 
The person has the privilege of paying the balance; and 
(3) 
. A finance charge may be computed by the creditor from 
time to time on an outstanding unpaid balance. 


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(C.) 
"Access Device" means any card, plate, code, account number, 
electronic serial number, personal identification number, or other 
telecommunications service, 
equipment, 
or 
instrumental 
identifier, or other means of account access that can be used alone 
or in conjunction with another access device, to obtain money, 
goods, services, or any other thing of value, or that can be used to 
initiate a transfer of fund (other than a transfer originated solely by 
paper instrument); 
(D.) 
"Counterfeit Access Device" means any access device that is 
counterfeit, fictitious, altered, or forged, or an identifiable 
component of an access device or a counterfeit access device; 
(E.) 
"Unauthorized Access Device" means any d~vice that is lost, 
stolen, expired, revoked, cancelled, or obtained with intent to 
defraud; 
(F.) 
"Produce" includes design, alter, authenticate, duplicate, or 
assemble; 
(G.) 
"Traffic" means transfer, or otherwise dispose of, to another, or to 
obtain control of with intent to transfer or dispose of; 
(H.) 
"Device-making equipment" means any equipment, mechanism, or 
impression designed or primarily used for making an access device 
or a counterfeit access device; 
(1.) 
(J.) 
"Credit Card System Member" means a financial institution or 
other entity that is a member of a credit card system, including an 
entity, whether affiliated with or identical to the credit card issuer, 
that is the sole member of a credit card system; 
"Scanning Receiver" means a device or apparatus that can be used 
to intercept a wire or electronic communication; 
(K.) 
"College Student Credit Card Account" means a credit card 
account under an open-end consumer credit plan established or 
maintained for or on behalf of any college student; 
(L.) 
"College Student" means an individual: 
(1.) 
Who is a full-time student attending an institution of higher 
education; and 
(2.) 
Who has not yet attained the age of 21. 
(M.) 
"Institution of Higher Education" means institutions offering 
tertiary degree programs and post secondary programs; 
(N.) 
"Tertiary Degree Programs" refer to courses of study leading to 
master's, doctor's or similar degrees. It also includes courses of 


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study which by themselves may be only for one, two, or three-year 
courses of study leading to less than a bachelor's degree program, 
but which can subsequently be credited in full bachelor's degrees. 
SEC. 4. 
Privacy and Fraud. -
(A.) 
No person, firm, partnership, corporation, or other business entity 
that accepts a credit card for a business transaction shall write, 
cause to be written, or require that a credit card holder write 
personal identification, not required by the credit card issuer, on 
the credit card transaction form. 
Personal 
identification 
information shall include, but shall not be limited to a credit card 
holder's address or telephone number. 
(B.) 
Acts of fraud and related activity in connection with access devices 
are hereby prohibited, such as those who shall: 
1) Knowingly and with intent to defraud uses or traffics in one or 
more counterfeit access devices; 
2) Knowingly and with intent to defraud uses or traffics in or uses 
any unauthorized device, and by such conduct obtains anything 
of value; 
3) Knowingly and with intent to defraud, produces any counterfeit 
access device or any unauthorized access device; 
4) Knowingly and with intent to defraud, produces, traffics in, has 
control or custody of, or possesses device-making equipment; 
5) Knowingly and with intent to defraud, uses, produces, traffics 
in, has control or custody of, or possesses a telecommunications 
device; 
6) Knowingly and with intent to defraud, uses, produces, traffics 
in, has control or custody of, or possesses: 
a.) A scanning receiver; or 
b.) Hardware or software used for altering or modifying 
telecommunications instruments to obtain unauthorized 
access to telecommunications devices 
7) Knowingly and with intent to defraud effects transaction, with 
one or more access devices issued to another person or persons, 
to receive payment or any other thing of value; 
8) Without authorization of the issuer of the access device, 
knowingly and with intent to defraud, solicits for the purpose 
of: 
i) Offering an access device; or 


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ii) Selling information regarding an application to obtain 
an access device; or 
9) Without the authorization of the credit card system member or 
its agent, knowingly and with intent to defraud causes or 
arranges for another person to present to the member or its 
agent, for payment, one or more evidence or records of 
transactions made by an access device; 
(C.) 
The provisions of this section shall apply to all credit card 
transactions; 
provided, however, that the provisions of this section shall not be 
construed to prevent a person, firm, partnerships, corporation, or 
other business entity from requesting information that is necessary 
for shipping, delivery, or installation or purchased merchandise or 
services or for a warranty when such information is provided 
voluntarily by a credit holder. In addition, the provisions of this 
section shall not be construed to prohibit a person, firm, 
partnership, corporation or other business entity from requesting 
one or more additional identification cards to confirm the identity 
of the credit card user. 
SEC. 5. 
Notice and Minimum Payments. -
(A.) 
In the case of any credit card under an open-end-credit plan, no 
increase in any annual percentage rate of interest shall be allowed 
except an increase due 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 shall likewise 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. 
(B.) 
If, after receiving a notice 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, the following 
shall be observed: 
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 
cancellations shall be subject to all other terms and conditions 
applicable with respect to such account before the cancellation. 
(C.) 
The notice referred to with respect to an increase in any annual 
percentage rate of interest or any change in an index shall be made 


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in a clear and conspicuous manner and shall contain a brief 
statement of the rights of the consumer: 
1.) To cancel the account before the effective date of the increase or 
change in index; and 
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. 
(D.) 
Additional information regarding repayment of the outstanding 
balance of the consumer under the account, appearing in 
conspicuous type on the front of the first page of each such billing 
statement, and accompanied by an appropriate explanation, shall 
contain: 
1.) The words "Minimum Payment Warning: Making only the 
minimum payment will increase the amount of interest that you 
pay and the time it will take to repay your outstanding 
balance" ; 
2.) The number of years and months (rounded to the nearest 
month) that it would take for the consumer to pay the entire 
amount of that balance, if the consumer pays only the required 
minimum monthly payments; 
3.) The total cost to the consumer, shown as the sum of all principal 
and interest payments, and the breakdown of the total costs in 
interest and principal, of paying that balance in full if the 
consumer pays only the required minimum monthly payments, 
and if no further advances are made; 
4.) The monthly payment amount that would be required for the 
consumer to eliminate the outstanding balance in 36 months if 
no further advances are made; and 
5.) A toll-free number at which the consumer may receive 
information about accessing credit counseling and debt 
management services. 
SEC. 6. 
Imposab/e Interest Rates and Charges. -
(A.) 
Interest rates imposed on any credit card on purchases and cash 
advances made through such facility shall in no case be higher than 
1 % per month or 12% per annum, without compounding; 
(B.) 
Surcharges or penalties shall likewise be limited to a ceiling of 1 % 
per month, without compounding; 
(C.) 
No other costs shall be imposed other than the foregoing except for 
reasonable attorney's fees and expenses of collection completely 


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disclosed to, sufficiently understood by and voluntarily agreed 
with by an applicant for a credit card; 
(D.) 
The pertinent provisions of the Truth in Lending Act shall apply 
suppletorily insofar as relevant and complimentary to the 
provisions of this Act. 
SEC. 7. 
Student Credit Card Protection. -
(A.) 
Unless a parent, legal guardian, or spouse of a college student 
assumes joint liability for debts incurred by the student in 
connection with a college student credit card account: 
1.) No credit card issuer shall grant a college student card account 
where the credit limit for that account exceeds, during a full 
calendar year: 
(a.)Twenty percent (20%) of the annual gross income of the 
student, if any; or 
(b.) Fifteen Thousand Pesos (P15,000.00), whichever is greater; 
and 
2.) No credit card issuer shall grant a student a credit card account, 
if the credit limit for that credit card account, combined with the 
credit limits of any other credit card accounts held by the 
student, would exceed thirty percent (30%) of the annual gross 
income of the student, jf any, in the most recently completed 
calendar year. 
(B.) 
No increase shall be made in the amount of credit authorized to be 
extended under a college student credit card account for which a 
parent, legal guardian, or spouse of the consumer has assumed 
joint liability, unless such parent, guardian, or spouse, as the case 
may be, approves in writing, and assumes joint liability for, such 
increase. 
(C.) 
For purposes of this Act, a credit card issuer shall require adequate 
proof of income, income history, and credit history, subject to the 
rules of the Monetary Board of the l3angko Sentral ng Pilipinas, 
before any college student credit card account may be opened by or 
on behalf of a student. 
(D.) 
No credit card issuer may open a credit card account for, or issue 
any credit card to, any college student who: 
1) Has no verifiable annual gross income; and 
2) Already maintains a credit card under an open-end-consumer 
credit plan with that credit card issuer; or any affiliate thereof. 


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(E.) 
The Monetary Board of the Bangko Sentral ng Pilipinas may, by 
rule, provide for exemptions to the provisions of this subsections, 
as deemed necessary or appropriate and consistent with the 
purpose of this Act. 
SEC. 8. Penalties.-
(A.) 
Any violation of the provisions of this Act shaH be punishable by a 
penalty of imprisonment of rzrres/o mayor or a fine ranging from 
Fifty Thousand Pesos (P50,OOO.OO) to One Hundred Thousand 
Pesos (PIOO,OOO.OO), or both, depending upon the gravity of the act 
committed and the circumstances attendant thereto as may be 
determined by the court. 
(B.) 
If the entity responsible for the prohibited act is a corporation, trust 
or firm, partnership, association, or any other entity, the penalty or 
imprisonment shall be imposed on the entity's responsible officers, 
including, but not limited to, the president, vice-president, chief 
executive officer, general manager, managing director, or partner 
directly responsible therefor. 
(C.) 
In case the violation is committed by, or in the interest of a foreign 
juridical person duly licensed to engage in business in the 
Philippines, such license to engage in business in the Philippines 
shall immediately be revoked. 
SEC. 9. 
The National Bureau of Investigation (NBI) shall, in addition 
to any other agency having such authority, have the authority to investigate 
offeflses under this Act. 
SEC. 10. 
Any person who engages in the conduct of any trade or 
commerce and who suffer any loss or money or property, real or personal, as a 
result of the use or employment by another person who engages in any act 
proscribed in this Act may bring in court, without prejudice to the criminal 
liability provided for in this Act, whether by way of original complaint, 
counterclaim, cross-claim or third-party action for damages and such equitable 
relief, including an injunction, as the court deems to be necessary and proper. 
Such person, if he has not suffered any loss of money or property, may obtain 
such an injunction if it can be shown that the aforementioned unfair method of 
competition, act or practice may have the effect of causing such loss of money or 
property. 
For purposes of this section, the injured party has one (1) year from the 
date of the cause of action arises to file the appropriate complaint. 
SEC. 11. 
If "ny provision or part hereof, is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise 
affected shall remain valid and subsisting. 
SEC. 12. Any law, presidential decree or issuance, executive order, letter 
of instruction, administrative order, rule or regulation contrary to, or inconsistent 
with the provision of this Act is hereby repealed, modified, or amended 
accordingl y. 


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SEC. 13. This Act shall take effect fifteen (15) days after its publication in 
at least two (2) newspaper of general circulation or the Official Gazette. 
Approved,