There are a number of good reasons in favor of having and using a credit card. It’s like owning a gun – it’s really a matter of how you use it. I know, not because I own a gun, but because I’ve handled an international credit card institution for years.
Still, we all know the possible adverse results in the unchecked use of “plastics” or credit cards, such as this one: “THERE’S a credit-card horror story that’s become some sort of an urban legend: A television personality, after losing his job in a top network, resorts to using his plastic money. By the time he finds employment in the rival network, he has wracked up P58,000 in credit card bills. But he figures he’s not yet ready to pay in full, so he pays just the minimum amount due. Yet after five years, he is shocked to realize that his credit card debt had ballooned more than 10 times to P700,000.”
Perhaps you’ve heard, or, most probably, experienced certain “innovative” strategies used by credit card companies and their collection agencies in “persuading” you to pay (they are, of course, entitled to payment). With the rising complaints against these strategies, the Bangko Sentral ng Pilipinas (BSP) issued a set of rules and regulations governing the credit card operations of banks and affiliate credit card companies. Without limiting the general application of the foregoing, the following are considered unfair collection practices
a) the use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person.
b) the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws.
c) disclosure of the names of credit cardholders who allegedly refuse to pay debts, with certain exceptions.
d) threat to take any action that cannot legally be taken.
e) communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed.
f) any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder.
g) making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 a.m. or after 10:00 p.m., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.
As a rule, banks, subsidiary/affiliate credit card companies, collection agencies, counsels and other agents may resort to all reasonable and legally permissible means to collect amounts due them under the credit card agreement. However, in the exercise of their rights and performance of duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous or untoward acts, including those enumerated above.
I was reminded of this topic when, just last week, I handled my first case representing a credit card holder. This is something new to me because, as noted above, I was at the other side of the fence, so to speak. Maybe I should discuss more relevant topics on credit cards. (Read the full text of BSP Circular 454, series of 2004. See also: Credit cards – How to Stay Ahead of Runaway Credit Card Debt.)
Related Posts:- Cash price vs. credit card price
- Credit card fraud
- What would you do as a Credit Card Company?
- Bouncing Checks (BP 22): An Extended Discussion
Tinkering with internet tools comes with the bonus of better understanding how existing laws apply to the third wave - that of technology, particularly the internet. This is also a great medium to disseminate and discuss ideas across borders, time, color or creed. 
Loading ...
forgive me for my ignorance. stupid as i may sound, i’d still go on to ask this question..to put a stop to this growing ignorance.
regarding the use of credit card
when will an interest be required to be paid?
is it all the time? like for every purchase made or for every billing period?
or is it imposed only in time of delay in payment?
i’ve been wanting to use a credit card. the ignorance mentioned above keeps me from availing of this convenient mode of payment.
thanks.
wannaswipe, interest is not payable all the time; it’s not payable for every purchase made or for every billing period. Also, it’s not imposed only in time of delay in payment.
If you look at your credit card bill, there’s the total amount due and the minimum amount due. If you pay all your purchases for the last billing cycle, then you don’t pay interest or finance charges. If you pay only the minimum amount due, but there’s a remaining balance in the Total Amount Due, then you pay a finance charge for that balance. Bottomline, pay all your purchases for the last billing cycle, and not only the minimum amount due.
I intend to write another article on this…primarily to the effect that if you use your credit card wisely, you don’t pay interests or finance charges.
Pingback: Credit cards and unfair collection practices at Philippine e-Legal Forum
I’ve been searching the net for information about credit card debts and the laws here in the Philippines which cover these kinds of problems. I don’t even know if I should start consulting a lawyer, my knowledge of law extends only to our constitution. Anyway, I’m glad I saw your website because I’ve been itching to ask somebody for information regarding this. I hope you can help me.
My older sister owes a number credit card companies money and she hasn’t been able to pay regularly because last year she moved to Dubai to work and had to establish herself first. In addition, she is also supporting my younger brother thru college and money has been pretty scarce for us. Because she’s abroad, the collection agencies hound my brother and I instead. Some have made phone calls which threaten even my aunt next door, some have gone here to our home and are waving threats of warrant of arrests and such. Another incident which I personally have exprienced is that a representative of one credit card company contacted me thru text messages and her manner was brash and unprofessional. REALLY unprofessional. When I told her of what I thought about her approach, she said something like: “For your information taga BF Homes ako. Ang sabihin mo lang nabuko lang kayo.” I mean, to me it sounded very inappropriate but is this how they really do things? Now my brother and I are really stressed. This morning another collection agency left a note saying that they have assessed our property and found it sufficient for payment. What?? This property we’re living in isn’t even owned by my sister. And my sister owes about P40,000 in that credit card company which they represented.
I really need your professional opinion on this. Thanks so much.
Elfin, let me assume that “professional opinion”, which is what you seek, may be construed as legal opinion. I hope you understand that we are prohibited from giving any legal opinion here, as you may have noticed from other posts here.
Anyway, the Bangko Sentral issued the guidelines to address unfair collection practices. You may consider what happened to you as an unfair collection practice. If you situation warrants the filing of a complaint with the Bangko Sentral, then perhaps you may want to avail of that option. Still, the easiest way to get out of that predicament is to pay the credit card debt (but non-payment is not an excuse for the unfair practices).
is it true that after not settling your accounts with the credit card company, their bank will ripped off their records after 5 yrs, as if you dont have any unsettled accounts with them and you can apply for credit card as a new customer?
Jane, your name would still appear in the blacklist, which means that your application may still be denied.
I had an outstanding balance from a major credit card company here in the Philippines. I havent paid my bills for 5 months and got a mail from a collection agency and telling me to pay the balance in full plus the legal fees 10 days after upon the receipt of their demand letter. Upon getting the demand letter, I called the agency right away to make arrangment if i can pay through installment, the incharge told me i need to pay hafl of the amount in 10 days and he other half in 2 payments. I told the lady that I will just pay directly to the credit card company and i will contact them to make payment re-structure. the lady told me that I could no longer do that since my cc company turned over my account to them, nor my cc company will ever send me billing statement. I then decided to just wait for their netx letter and will settle evrything in court so I could request for an easy payment scheme. I havent heared anything from the collection agency then, until I got a billing stateement form my cc company with an outstanding balance nearly 150% to its original amount.
do you have any idea what had happened to my account?
Jane, the increased amount is due to the interests, penalties and surcharges. Try to negotiate with your credit card company.
Sir gud pm! I am also a credit card holder. Recently I received a demand letter from a collection agency asking me pay my obligations, like jane i called them up to ask for a settlement as advised by my lawyer friend but sad to say, the collection officer to whom i am talking to refuse to give a favorable scheme but instead scare me of doing horrible things like going to my office, to our house and even include my mother of the possible case they will file if I can’t pay the amount they demanded from me. I know my responsibility and i won’t run from my obligations. Sir is there any leagl way that I can do to pursuade them to grant me an amnesty program in which i can pay my debt according to my capacity? I’m really troubled, I hope and pray that you can help me..Thanks and God Bless!
Joyce, here’s my problem – I strongly support the alternative means of dispute resolution. A court action should always be the last resort, but it seems that the “legal way” and “persuasion” you mentioned may likely end up as a court case. Find someone who could talk to your credit card company.
hi atty,
i want to know about RA 2812 Credit Abandonment Law, hope you can furnish me copy asap. thanks. need it badly. and where can i reach you regarding legal matter?
hi atty…i’d like to know what action can i take regarding a demand letter sent to me for a supposedly a credit card debt that i had paid for completely through a settlement scheme 5 years ago. the law firm acting in behalf of their client bank that underwent a merger recently. for the last four years, i have not received any communication with the credit card company after the last payment must be made. now after five years, this thing happened to make things worse they want full payment within one week. i refuse to pay for something that i do not owe. what can tell them?
Lynnette,
Ignore the calls, threats, and demand letters of the collection agency. The collection agency is trying to hood wink you so they could make a fast buck. Little do card holders know that their credit card was insured on the side by the credit card company. In case of non-payment by the credit card holder, the credit card company collects from the insurance. Your files are then archived and eventually destroyed.
Now, the collection agency, in cahoots with the scrupulous account officers/employees of the credit card company, will send you a demand letter to earn money for themselves. In other words, they are no longer collecting in behalf of the credit card company.
When you receive their demand letter, cross out your name, and write “RETURN TO SENDER”. Drop the letter in the post office.
Meantime, keep your receipt for the full payment of your credit card debt that you made years ago.
That’s it.
Dear Atty Fred,
If I am a victim of unfair collection practices of a credit card company or collection agency, can I file charges against them?