GR 175490: SC reduced interest and penalty charges

G.R. 175490 - Macalinao vs BPI Case According to Supreme Court: The Interest Rate and Penalty Charge of 3% Per Month or 36% Per Annum Should Be Reduced to 2% Per Month or 24% Per Annum

Macalinao petition on this issue was granted by the Supreme Court. It stated that the interest rate and penalty charge of 3% per month by the Court of Appeal should be equitably reduced to 2% per month or 24% per annum. Although it is in the Terms and Conditions Governing the Issuance and Use of the BPI Credit Card, the Supreme Court declared the 3% interest rate as void and as if there was no express contract thereon. The same ruling was applied to the penalty charge, citing Article 1229 of the Civil Code in addition.

Since credit cards usually charge more than 3% interest rate per month, you can benefit from this specific ruling of the Supreme Court. When you become delinquent on your credit card, keep the communication open. Ask for a re-computation of your account/s based on this ruling. Also, it would be better if you kept your monthly statements of account so that you yourself can plot the transactions in your computer and be able to re-compute your account as how the Supreme Court did it.

Transcript of the ruling: http://sc.judiciary.gov.ph/jurisprudence/2009/september2009/175490.htm