News: Credit Card Interest Rates

I am a Money Magnet! We are Money Magnets!

In the news today, the Senate committee on banks, financial institutions and currencies, headed by Senator Francis Escudero, sponsored a bill called "Credit Card and Other Access Device of 2009" aiming to put a cap on the monthly interest rate credit card companies may charge its costumers.

Under the bill, the maximum interest rate that may be imposed on credit card users will be one percent (1%) a month.  This is a big jump from current interest rates ranging around  3-4%.  The good senator said that he wanted the bill passed to ease the burden of credit card holders caused by high interest rates charged by banks / credit card companies.

Aside from the cap on the monthly interest rate, the bill also prohibits credit card companies from compounding the interest charged on their customers.  It will also require credit card companies to remind customers in the billing statements that paying only the minimum payable amount, and not the entire amount of credit, would result in higher interest payment. 

This is certainly good news for credit card holders.  However, an interest rate of 1% per month is still big.  I hope none of you will fall into the trap and think otherwise.  Remember to spend wisely and pay all your debts as soon as possible.  

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