In the country, the prevalent interest rate for credit cards is 3.5%. For Balance Transfer facility, it is 0.88%. For personal loans, you are lucky if you charged 1.7%. With financial math, the equivalent annual percentage rates (APR) are

1.035^12 = 1.511068657…
1.0088^12 = 1.11086397….
1.017^12 = 1.22419735….

that’s 51.1% APR for credit cards

11.1% APR for balance transfers

22.42% APR for balance transfers

In the US, and other developed countries, standard APR rates play only around 10%, personal loans at 5%, while balance transfer rates are almost down to 0% APR. Isn’t it unfair? What’s wrong with the Philippines?

Luckily, due to the fierce competition on the country’s local credit card market, some banks has already started offering lower interest rates. Some at 3% monthly interest , others at 2.99%, but the lowest I am aware of is 2.25%. Thanks to that, competition is getting more fierce and soon, other banks will be forced to lower their charges.

Because of this high interest rates, many of credit card owners in our country are like running on circles or a threadmill - they go to work, get paid, pay their bills, yet interest charged are almost killing. Imagine a P20,000 debt, you’ll be billed P700 a month for interests alone for it. In most cases, people seldom get a chance to pay off everything rather they get their debts balloon to a ridiculously high amount.

We should commend these banks that started a better competition in the Philippine financial market. Special mention to Eastwest Bank, which now holds the lowest credit card interest rates - at 2.25%, an all time low in Philippine credit card market history for revolving balance. I am not in any way connected to Eastwest Bank, but I think their efforts to be able to compete on the credit card market is worth noticing.

Hurray EastWest Bank! May other banks follow your lead.

Please support the petition for a lower interest rate by signing here –> petition to lower interest rates of philippine credit cards and loans services