How to Collect Money Lent via Credit Card: Demand Letter and Small Claims (Philippines)

This guide is for laypersons. It gives practical, legally grounded steps to recover money you paid on your own credit card for someone else (a friend, partner, relative, co-worker), who promised to reimburse you but hasn’t. It covers (1) demand letters and (2) filing a small claims case. It’s general information, not legal advice.

1) First principles (what you’re actually enforcing)

Two separate relationships exist.
1. You ↔ bank/issuer: You remain 100% liable to the card issuer for all posted charges, interest, and fees.
2. You ↔ borrower: A personal loan/reimbursement obligation arose when you used your card for the borrower (or advanced cash and gave it to them). You can sue the borrower for sum of money based on:
- Contract of loan (mutuum) or reimbursement agreement (even if oral).
- Unjust enrichment / quasi-contract, if there was no clear loan contract but the borrower benefited at your expense.
- Acknowledgment/Promissory note, if signed later.
No crime for mere non-payment. Non-payment of a loan is civil, not criminal, unless there was fraud (e.g., estafa) or a bad check (B.P. 22). Most cases are civil small claims.
Interest you can claim from the borrower.
- If you agreed on interest, that governs (courts can reduce unconscionable rates).
- If no interest was agreed, courts generally award 6% per annum legal interest as damages for forbearance of money, from the time of default (usually your demand date or suit filing), until fully paid.

2) Before you do anything: evidence checklist

You win small claims by paper. Gather and organize:

Proof of the loan/reimbursement promise: chats, texts, emails, DMs, voice notes, promissory note, acknowledgment receipt, GCash/bank transfer notes (“for my tuition”, “for my flight”, etc.), or any message where they requested/authorized you to swipe your card for them.
Proof of disbursement: card statement highlighting the borrower’s charges; merchant e-receipts; cash advance slip; ATM slip; store charge slip; booking/e-ticket with their name; bank/GCash transfer to them.
Proof of partial payments (if any): deposit slips, GCASH screens, receipts, chat confirmations.
Your identity & addresses: government ID; your and borrower’s last known residential and work addresses; phone and email.
Computation: principal, agreed interest (if any), or legal interest (6% p.a.) from demand date; minus any payments.
Barangay conciliation documents** (see §4): Certificate to File Action (CFA), if required.

Tip: Print chats with timestamps and participants; keep screenshots in color; bring the device on hearing day to authenticate.

3) The demand letter

While not always legally required, a clear, provable demand:

starts default (and interest),
shows reasonableness,
and often triggers voluntary payment.

What to put

Your and borrower’s full names and addresses.
Facts: when/how they asked you to pay via your card; what was paid; amounts and dates.
Amount due: principal + any agreed interest/fees (or state that legal interest of 6% p.a. will apply from demand date).
Deadline: a definite date (e.g., 10–15 calendar days from receipt).
How to pay: bank/GCash details.
Warning: you will file Small Claims and seek costs if unpaid.
Attachments: copies of statements, receipts, chats.
Signature, date, and your contact details.

How to serve (to prove receipt)

Personal delivery with signed acknowledgment on a copy; or
Registered mail with registry receipt + return card (green card); or
Courier with delivery confirmation; and
Email/messaging (keep read receipts/screens), in addition to one of the above if possible.

Sample demand letter (editable)

[Date]

[Borrower’s Name]
[Address]

Subject: DEMAND TO PAY – [Total Amount] FOR CHARGES YOU INCURRED ON MY CREDIT CARD

Dear [Mr./Ms. Lastname]:

On [date], at your request, I used my [Card brand/bank] credit card to pay [describe item(s)/service(s)], totaling ₱[amount]. Copies of the statement/receipts are attached. You promised to reimburse me in full on or before [date/promise], but to date you have not done so. You have paid only ₱[amount], leaving a balance of ₱[balance].

I hereby demand that you pay ₱[balance] within ten (10) calendar days from your receipt of this letter, together with [agreed interest of __% per month/year OR legal interest of 6% per annum] from the date of this demand until fully paid.

Kindly deposit to:
[Bank/GCash details]; then send proof of payment to [your email/mobile].

If you fail to pay within the period, I will file a Small Claims case to recover the amount and allowable costs, without further notice.

Very truly yours,

[Your Name]
[Address / Mobile / Email]
Attachments: [List]

4) Barangay conciliation (Katarungang Pambarangay)

Many money claims between natural persons who reside in the same city/municipality must first go to the Punong Barangay for conciliation/mediation. If settlement fails, you get a Certificate to File Action (CFA).
Not required if parties live in different cities/municipalities, involve a juridical entity (corporation, partnership), urgent legal action is needed, or other statutory exceptions apply.
If required and you skip it, courts can dismiss your case for being premature. When unsure, inquire at your barangay—it’s quick and inexpensive.

5) Can you use Small Claims? (jurisdiction, caps, venue)

Court: Metropolitan/ Municipal Trial Courts (MeTC/MTC/MCTC) handle Small Claims for purely money claims (loan, debt, services, rentals, damages arising from contract).
Amount cap: There is a peso ceiling for small claims exclusive of interest, damages, attorney’s fees, and costs.
- Important: This cap has been revised upward over time. Many practitioners now use ₱1,000,000 as the reference ceiling nationwide, but verify the current cap with the clerk of court or the latest Supreme Court issuance when you file.
- If your claim exceeds the cap, you may waive the excess to stay in small claims, or file a regular civil action.
Venue: File where you or the defendant resides (check the latest rule text). Pick the forum that’s most practical for service and your appearance.
Who appears: No lawyers may appear for parties in small claims (except when the party is a lawyer, or as otherwise allowed for juridical entities’ authorized representatives). You can consult a lawyer before filing, but you personally attend the hearing.

6) Prescriptive periods (deadlines to sue)

Written contract: 10 years.
Oral contract / quasi-contract (unjust enrichment): 6 years.
When the clock starts:
- If the loan was due on demand from the start, it’s generally demandable at once, so prescription typically runs from the date of the loan/advance.
- If the promise was to reimburse you upon your payment to the bank or on a later agreed date, count from that later due date.
Practical tip: Don’t wait. Send a demand promptly and file within the safe window.

7) Preparing and filing your Small Claims case

Forms & contents

Ask the Office of the Clerk of Court for the latest Small Claims (SCC) forms, including the Verified Statement of Claim. You’ll provide:

Parties’ details: names, addresses, contact info (include workplace, email, messenger handles if any).
Nature of claim: “Sum of money for reimbursement/loan paid via my credit card on defendant’s behalf.”
Amount: principal (exclusive of interest/costs for jurisdictional cap).
Material facts: short, dated story of what happened (who asked, what was bought/paid, when, how much, promise to repay, partial payments, demand made).
Relief sought: principal + legal or agreed interest from [demand date], plus costs.
Attachments: evidence bundle (see §2), demand letter + proof of service, and Barangay CFA if required.
Verification & Certification against Forum Shopping: signed by you; bring valid ID.

Filing fees

Pay filing and sheriff’s fees per the latest Rule 141 schedule.
Indigent/“pauper” applicants may seek fee exemption with a sworn financial statement + supporting documents.

After filing

The court issues Summons to the defendant (you can help by providing accurate addresses).
The defendant files a Response (there’s a standard SCC form) usually within 10 days from service.
The court sets a hearing (often one—fast and informal).

8) The hearing: what actually happens

Bring originals of your evidence and two sets of photocopies (one for the court, one to show/mark).
Organize: tab your exhibits; prepare a one-page computation (principal, payments, balance; interest calculation from demand date).
Tell your story plainly: who asked, how you paid with your card, how much, promise to repay, demand, non-payment.
Authenticate electronic evidence briefly: identify your phone number, the chat platform, how the screenshots were taken, that the messages were between you and defendant, and that they are unaltered to your knowledge.
Settlement first: Judges usually explore compromise. If none, the judge receives evidence and decides quickly, often the same day or soon after.
Decision: Small claims judgments are final, executory, and unappealable. (Extraordinary remedies exist only for grave procedural errors.)

9) After judgment: collecting (execution)

If the defendant still doesn’t pay:

File a Motion for Execution (there’s a form).
The sheriff can garnish bank accounts and debts due to the defendant, or levy on non-exempt personal property/real property.
Some assets are exempt by law (e.g., basic household necessities; portions of salaries have protections).
You may request a judgment debtor’s examination to identify assets and income.
Keep costs proportional—the goal is swift, practical recovery.

10) Special scenarios

Amount exceeds the small claims cap: You may waive the excess (state this clearly) to stay in small claims; otherwise, file a regular civil action (you’ll likely need a lawyer; discovery, pre-trial, and trial apply).
Multiple borrowers / co-makers: If both people asked you to pay or signed, allege they are solidarily liable (if supported by your evidence).
Supplementary cardholder situation: You (primary) still owe the bank. Your claim vs. the supplementary user is contractual reimbursement per your agreement with them; attach any supplementary user acknowledgement or chats.
Borrower outside your city/municipality: Barangay conciliation may no longer apply; venue and service become practical issues. If the borrower is abroad, service and enforcement get complex; consider regular action and professional advice.
Interest rate in your deal: Even if the Usury Law ceilings are no longer in force, courts may strike down unconscionable rates (e.g., multi-percent per month). It’s safer to claim legal interest (6% p.a.) unless you have a reasonable written rate.

11) Practical templates & checklists

A. Exhibit list (attach to your Statement of Claim)

Card statement(s) showing the charges for [merchant/booking] on [date] – Exh. “A”
Merchant e-receipts / e-tickets naming defendant – Exh. “B”
Chats/texts where defendant asked you to pay and promised to reimburse – Exh. “C”
Proof of partial payments (if any) – Exh. “D”
Demand letter dated [date] + proof of service – Exh. “E”
Barangay CFA (if applicable) – Exh. “F”
Your computation sheet – Exh. “G”

B. One-page computation (sample)

Principal (sum of defendant’s charges you paid): ₱___
Less payments received: (₱___)
Balance: ₱___
Interest: [agreed __% p.a./mo. OR legal 6% p.a.] from [demand date] to [hearing/decision date], then 6% p.a. until full satisfaction.
Total as of [date]: ₱___

12) Common pitfalls to avoid

No proof of demand: send one properly and keep proof.
Claiming the bank’s high card rate against the borrower without prior agreement: courts may reject it; stick to agreed rate or 6% p.a.
Skipping barangay conciliation when required: can cause dismissal.
Overshooting the cap and forgetting to waive the excess.
Venting on social media: can invite libel or data privacy issues; collect, don’t shame.
Disorganized evidence: small claims is fast; neat exhibits win cases.

13) Quick timeline (typical)

Week 0 – Send demand (10–15 days).
Week 2–4 – If required, complete barangay conciliation; secure CFA.
Week 3–6 – File small claims; summons served.
~10 days – Defendant files response.
Hearing day – Settlement or judgment (often same day or shortly after).
Post-judgment – Move for execution if unpaid.

14) Frequently asked questions

Q: We never wrote anything. Are chats enough? A: Yes, courts accept electronic communications if properly identified, authenticated, and relevant.

Q: Can I add new items later? A: Don’t split a single cause of action. Include all amounts arising from the same loan/arrangement. If you must, explain why an item is separate (e.g., a later, distinct loan).

Q: Can I claim the late fees the bank charged me? A: Only if your agreement with the borrower expressly covers those; otherwise, you generally get legal interest and allowable costs.

Q: Will I recover attorney’s fees? A: In small claims, lawyers can’t appear for parties. Courts may award costs and, where justified by law or stipulation, attorney’s fees, but don’t bank on it.

15) Final notes (housekeeping)

Bring IDs, originals, and clean copies of everything.
Dress neatly, be brief, be factual.
Double-check the current small claims cap, venue rule, and fees with the clerk of court. These change over time.
For complex scenarios (defendant abroad, corporate defendants, large amounts, or signs of fraud), consult counsel for tailored advice.

If you want, I can turn this into a printable packet—filled-out sample forms, a computation sheet, and your demand letter pre-drafted with your details.