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Revisiting Interest Rate Policies on Credit Cards


There are about 10 bills filed at the House of Representatives seeking to set ceilings on interest rate and other charges on credit card transactions. The primary objective of these bills is to protect consumers, particularly those who have difficulty in settling their piled up credit card debt. The focus of this paper will be on the merits and drawbacks of putting a cap on interest rate charges of credit card bills. In particular, the experiences of other countries which have introduced the same regulation will be cited to support or counter the various arguments. A brief background of the credit card industry will be discussed to provide the context for the analysis. Some concluding remarks will be given at the end of the paper.


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Jul 06, 2013