In the Philippines, the credit card industry is primarily governed by Republic Act No. 10870, also known as the Philippine Credit Card Industry Regulation Law, alongside the manual of regulations issued by the Bangko Sentral ng Pilipinas (BSP). This legal framework ensures that the relationship between the issuer and the cardholder is grounded in transparency, fairness, and accountability.

I. Fundamental Rights of the Cardholder

The law provides specific protections to prevent predatory lending practices and ensure consumers are fully informed of their financial obligations.

1. Right to Information and Transparency

Before a credit card is issued, the issuer must provide a clear and concise disclosure of all fees, interests, and charges. This includes:

The Annual Percentage Rate (APR).
Cash advance fees and late payment penalties.
The method of computing the balance subject to interest.
A "Summary of Credit Terms" written in plain language.

2. Right Against Unfair Collection Practices

Credit card issuers and their collection agents are strictly prohibited from using harassment, threats, or deceptive tactics. Under BSP Circulars, prohibited acts include:

Using threat of violence or other criminal means to harm the physical person, reputation, or property of the debtor.
Using profane or obscene language.
Disclosing the debtor's name to the public or contacting them at unreasonable hours (generally before 6:00 AM or after 9:00 PM), unless waived.

3. Right to Privacy and Data Protection

The Data Privacy Act of 2012 (R.A. 10173) protects cardholders' personal information. Issuers cannot share cardholder data with third parties (such as marketing agencies or collection firms) without explicit consent, except under specific legal circumstances.

4. Right to Dispute Erroneous Billings

Cardholders have the right to contest discrepancies in their billing statements. Upon written notice of a billing error, the issuer must:

Acknowledge the receipt of the dispute.
Conduct an investigation within a prescribed period.
Refrain from imposing finance charges on the disputed amount while the investigation is ongoing.

II. Primary Responsibilities of the Cardholder

While the law protects consumers, it also imposes strict obligations on cardholders to maintain the integrity of the credit system.

1. Obligation of Prompt Payment

The cardholder is legally bound to pay at least the Minimum Amount Due on or before the due date. Failure to do so allows the issuer to impose late payment fees and higher interest rates. Continuous non-payment can lead to the "acceleration" of the entire debt, making the full balance immediately demandable.

2. Duty of Diligence and Security

The cardholder is responsible for the physical security of the card and the confidentiality of the Personal Identification Number (PIN) or CVV.

Loss/Theft Reporting: In the event of loss or theft, the cardholder must notify the issuer immediately. Generally, the cardholder is only liable for unauthorized transactions made before the report is filed.

3. Understanding the "Finance Charge"

It is the cardholder's responsibility to understand that paying only the minimum amount will result in the accrual of interest on the remaining balance. Under Philippine law, interest is compounded, and long-term reliance on minimum payments can lead to a "debt spiral."

III. Legal Consequences of Default

In the Philippines, "debtors' prison" does not exist for the inability to pay a loan (Article III, Section 20 of the 1987 Constitution). However, credit card default carries significant civil and practical consequences:

Civil Suit: The issuer can file a collection suit (Sum of Money) to recover the debt, plus interest, attorney's fees, and litigation costs.
Negative Credit Rating: Default is reported to the Credit Information Corporation (CIC). A poor credit score hinders future applications for housing loans, car loans, and business permits.
Small Claims Court: For debts not exceeding PHP 1,000,000, issuers often use the expedited Small Claims procedure, which does not require the presence of lawyers.

IV. The Role of the Bangko Sentral ng Pilipinas (BSP)

The BSP acts as the primary mediator. If a cardholder feels their rights under R.A. 10870 have been violated (e.g., excessive interest or harassment), they may file a formal complaint with the BSP Consumer Protection Department. The BSP has the power to sanction banks and quasi-banks that fail to comply with the Credit Card Industry Regulation Law.

Feature	Description
Governing Law	Republic Act No. 10870
Primary Regulator	Bangko Sentral ng Pilipinas (BSP)
Interest Ceiling	Currently capped at 3% per month (standard) as per BSP circulars
Late Fee Cap	Max PHP 850 or as specified by the latest BSP guidelines