Global: Credit Card Association of the Philippines to Simplify Credit Card Terms

The Credit Card Association of the Philippines (CCAP) is set to streamline and simplify credit card terminologies to enhance consumer understanding and financial literacy. This initiative aims to bridge the gap between regulatory jargon and everyday comprehension, allowing consumers to fully utilize the benefits of their credit cards.

According to CCAP executive director Alex Ilagan, “By fully understanding credit card terminologies, consumers can reap the full benefits of their credit card, such as using it interest-free by paying in full on or before the due date.” He added that consumers could also “maximize the credit float by making large purchases just after the billing cutoff date to enjoy up to 51 days of credit without interest, thereby managing their cash flows more effectively.”

CCAP highlighted that common and often misunderstood terms include payment due date, total and minimum amount due, late penalties, and interest charges. Other terms such as fees, credit limit, billing cycle or cut-off date, one-time pin (OTP), and card verification value (CVV) are also frequently misunderstood by consumers.

To address this, CCAP will launch a campaign to make these terms easily understandable for all credit cardholders. The simplified terminologies will be shared across CCAP’s social media platforms using engaging formats such as comics and videos. This initiative aims to ensure that credit cardholders can easily grasp essential information, promoting better financial decision-making.

Since adopting its tagline “Pushing for Responsible Credit” in 2015, CCAP, composed of 16 credit card issuers, has led ongoing campaigns to enhance credit card literacy. These efforts include releasing educational materials in print and social media, conducting seminars at major colleges and universities in Metro Manila, and hosting webinars for both private and public sector employees.

In March, CCAP expressed full support for the Bangko Sentral ng Pilipinas’ assessment process in adjusting or maintaining the cap on credit card charges. The central bank, which reviews the interest rate ceilings on credit card transactions every six months, is currently evaluating whether to retain or adjust the three percent interest rate cap on credit card transactions.