CCAP to streamline credit card terms

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MANILA, Philippines — Issuers are looking to simplify common and complex credit card terminologies to better connect regulatory jargon with everyday understanding and enhance literacy, according to the Credit Card Association of the Philippines (CCAP).

“By fully understanding the 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,” CCAP executive director Alex Ilagan said in a statement.

“(Consumers can 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,” he said.

According to CCAP, some of the common and often misunderstood credit card terminologies include payment due date, total and minimum amount due, late penalties and interest charges.

The organization said other terms such as fees, credit limit, billing cycle or cut-off date, one-time pin (OTP) and card verification value (CVV) are also often misunderstood by consumers.

CCAP said it would launch a campaign to make these terms easily understandable to all credit cardholders.

The simplified credit card terminologies will be shared across CCAP’s social media platforms, utilizing formats such as comics and videos.

“This initiative aims to ensure that credit cardholders can easily grasp the essential information, promoting better financial decision-making,” the organization said.

CCAP composed of 16 credit card issuers has led a continuous campaign to enhance credit card literacy since it adopted its tagline “Pushing for Responsible Credit” in 2015.

This includes releasing educational materials in print and social media, conducting seminars at major colleges and universities in Metro Manila as well hosting webinars for both private and public sector employees.

Earlier in March, CCAP said it fully supports the assessment process of the Bangko Sentral ng Pilipinas in adjusting or keeping the cap on credit card charges.

The central bank, which reviews the interest rate ceilings on credit card transactions every six months, is still reviewing whether to keep or hike the three percent interest rate cap on credit card transactions.

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