A Comprehensive Legal Analysis

In the Philippines, one of the most persistent myths among debtors is that credit card debt “automatically disappears” or becomes unenforceable after a certain number of years. Many believe it is 3 years, 5 years, or even 7 years, often confusing Philippine law with foreign jurisdictions. The correct answer under Philippine law is clear and well-settled: credit card debt prescribes in ten (10) years from the time the cause of action accrues, pursuant to Article 1144 of the Civil Code.

This article exhaustively discusses the legal basis, jurisprudential confirmation, commencement of the period, interruptions, suspensions, effects of prescription, and practical realities that every debtor, creditor, lawyer, and judge must understand.

1. Legal Basis: Article 1144 of the Civil Code

Article 1144 of the Civil Code of the Philippines expressly provides:

“The following actions must be commenced within ten years:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.”

Credit card indebtedness arises from a written contract — the Credit Card Agreement or Terms and Conditions that the cardholder signs (or electronically accepts) upon application. The agreement creates the obligation to pay for all purchases, cash advances, finance charges, penalties, and other fees incurred through the use of the card.

Because the obligation is founded on a written contract, the prescriptive period is unequivocally 10 years under Article 1144(1).

This has been consistently applied by Philippine courts in collection cases filed by banks and credit card companies such as BPI, Metrobank, Citibank, HSBC, RCBC, Equicom, and others.

2. Why It Is Not 6 Years, 4 Years, or Any Shorter Period

Some debtors mistakenly argue that credit card debt is an “oral contract” (6 years under Article 1145) or an “open account” or “quasi-contract.” These arguments have been repeatedly rejected by courts:

The contract is written, not oral.
It is not a quasi-contract (solutio indebiti or negotiorum gestio).
It is not a mere “open mutual account” governed by the old Code of Commerce (which would have been 4 years under certain interpretations). The Supreme Court has clarified that modern credit card facilities are governed by the Civil Code, not the Code of Commerce.

Thus, attempts to shorten the period to 6 or 4 years invariably fail.

3. When Does the 10-Year Period Begin to Run?

The prescriptive period begins from the day the cause of action accrues (Article 1150, Civil Code), i.e., when the creditor can validly demand payment and sue in case of refusal.

In credit card cases, the accrual date is generally one of the following (whichever comes first):

a. The due date stated in the Statement of Account (SOA) when the minimum amount due is not paid.
b. The date the bank accelerates the obligation (most credit card agreements contain an acceleration clause making the entire outstanding balance immediately due upon default).
c. The date of the bank’s formal extrajudicial demand (demand letter), especially when the agreement does not fix a definite maturity date for the entire balance.

In practice, courts usually count from the last payment or the last activity on the account (purchase or cash advance) if no demand was made earlier, because continued use implies acknowledgment that the account is current.

4. Interruption of the Prescriptive Period (Article 1155, Civil Code)

This is the single most important reason why credit card debts almost never actually prescribe in real life.

Article 1155 provides:

“The prescription of actions is interrupted by:

Their filing before the courts;

A written extrajudicial demand by the creditors;

The written acknowledgment of the debt by the debtor.”

In practice:

Every partial payment (even ₱500) constitutes written acknowledgment and resets the 10-year clock to zero.
Every demand letter from the bank or its collection agency interrupts prescription and starts a new 10-year period.
Every restructuring, settlement offer acceptance, or promise to pay (if in writing or recorded) also interrupts.

Banks and collection agencies are well aware of this. They send demand letters regularly, and many debtors make token payments or acknowledge the debt in writing, unwittingly resetting the period repeatedly.

Result: A credit card debt incurred in 2005 can still be enforceable in 2025 if there has been any payment, demand, or acknowledgment within the last 10 years.

5. Suspension of the Prescriptive Period

Prescription is suspended (the clock temporarily stops) in cases such as:

While the debtor is absent from the Philippines (Article 1152, in certain cases).
During the pendency of a fortuitous event or force majeure that prevents the creditor from suing.
When there is a pending negotiation or moratorium agreed upon by the parties (jurisprudential).

Suspension is rarely invoked successfully in credit card cases.

6. Effects of Prescription

Once the 10-year period lapses without interruption:

a. The action to collect is forever barred. The court must dismiss the collection case if the debtor pleads prescription as an affirmative defense (Rule 16, Section 1(g), Rules of Court; laches may also be invoked).
b. The debt becomes a natural obligation (Articles 1423–1430, Civil Code). This means:

The debtor who voluntarily pays cannot recover the payment (no unjust enrichment).
The debt can still be offset against any amount the bank owes the debtor.
The debt may still appear in credit information reports (CIC rules allow negative information for up to 7 years after settlement or charge-off, but prescription is separate).
c. The creditor can no longer obtain a judicial judgment or execute against the debtor’s properties.

7. Relevant Supreme Court Decisions (Selected)

Bank of the Philippine Islands v. Spouses Royeca (G.R. No. 176664, July 21, 2008) – Confirmed 10-year period for credit card debt.
BPI Family Savings Bank, Inc. v. Spouses Yujuico (G.R. No. 175796, July 22, 2015) – Reaffirmed that the obligation arises from a written contract.
Citibank, N.A. v. Sabeniano (G.R. No. 156132, October 12, 2006) – Discussed nature of credit card obligations as written contracts.
Selegna Management v. UCPB (G.R. No. 165662, May 3, 2006) – Partial payment interrupts prescription.
Numerous Court of Appeals decisions (e.g., CA-G.R. CV No. 112678, Metrobank v. Tobias, 2020) uniformly apply the 10-year rule.

There is no Supreme Court ruling that has ever declared credit card prescription to be less than 10 years.

8. Practical Realities and Advice

For debtors: If you truly want the debt to prescribe, you must (1) make no payment whatsoever, (2) ignore all demand letters, (3) make no written acknowledgment or promise to pay, and (4) wait 10 years from the last activity or demand. In reality, very few succeed because banks are diligent with demand letters and most debtors eventually pay something or negotiate.
For creditors: Always send registered demand letters at least once every 8–9 years and keep records of partial payments.
After prescription, the only remaining leverage is moral suasion, credit reporting (limited duration), or blacklisting.

Conclusion

Yes, credit card debt in the Philippines prescribes after ten (10) years under Article 1144 of the Civil Code, counted from the accrual of the cause of action (usually the date of default or demand). However, because of frequent interruptions via partial payments and written demands, the overwhelming majority of credit card debts remain legally enforceable indefinitely until fully settled.

Prescription is a valid defense — but only for the rare debtor who has remained completely silent and inactive for a full decade. For everyone else, the obligation persists until paid.