Small Claims vs. Regular Civil Action for Credit Card Debt: Jurisdictional Amounts (Philippines)

Overview

Credit card disputes are, at their core, actions for sum of money arising from a written contract of loan/credit. In the Philippines, these may be brought either as a small claims case (a streamlined, largely paper-driven process before first-level courts) or as a regular civil action (ordinary procedure under the Rules of Court). The key practical divider is the jurisdictional amount—i.e., the peso cap that determines whether your claim qualifies as “small claims,” and, separately, which court has original jurisdiction over the case.

This article explains how to determine the proper forum for credit card suits, how to compute the jurisdictional amount, and the procedural consequences of choosing small claims versus a regular civil action.

A. Courts and Jurisdiction in Money Claims

1) Court levels that hear credit card cases

First-Level Courts: Metropolitan/Municipal Trial Courts (MeTC/MTC/MTCC/MCTC).
Regional Trial Courts (RTCs).

2) Amount-driven jurisdiction (regular civil actions)

First-Level Courts have exclusive original jurisdiction over civil actions where the demand does not exceed ₱2,000,000, exclusive of interest, damages, attorney’s fees, litigation costs, and the like (a result of the expanded jurisdiction under recent legislation).
RTCs have jurisdiction when the principal claim exceeds ₱2,000,000, computed on the same “principal-only” basis.

Practical effect: If your principal credit card claim is over ₱2,000,000, you must file a regular civil action with the RTC. If it is ₱2,000,000 or below, you may file a regular civil action with the proper first-level court—unless the amount also falls within the separate (smaller) small claims threshold and you wish to use that faster track.

B. The Small Claims Track for Credit Card Debt

1) Nature and scope

Small claims cover purely money claims: unpaid credit card charges, loans, services, or sales of goods, among others. No claim for damages other than the monetary sum (and limited incidentals) should be the centerpiece.

2) Jurisdictional amount for small claims

The small claims peso cap is lower than the ₱2,000,000 threshold for regular first-level court jurisdiction.
Historically, the Supreme Court has periodically raised the cap (e.g., from ₱100,000 to ₱200,000, then to ₱300,000 nationwide and ₱400,000 in Metro Manila in later iterations).
Because the cap is set by Supreme Court administrative circulars and may change, always verify the current ceiling before filing. (The computation rules below remain constant even as the number moves.)

3) Computation rules (crucial for both tracks)

When determining whether your claim fits small claims, and when determining which court has jurisdiction in regular suits:

Use the principal amount only. Exclude interest, penalties, liquidated damages, attorney’s fees, costs, and accruals (even if stipulated).
No claim-splitting. You cannot chop up one cause of action into smaller suits to squeeze into the small claims cap.
Joinder of causes of action by one plaintiff against the same defendant is allowed only if the aggregate principal of those causes stays within the cap (for small claims) and within the court’s amount jurisdiction (for regular suits).
Multiple plaintiffs/defendants: If stemming from separate, independent obligations, assess each cause of action. If arising from a single obligation (e.g., solidary co-makers), the single total principal controls.
Compulsory counterclaims: In small claims, a defendant’s counterclaim must also fit the small claims definition and cap; otherwise, it is not cognizable in that track.

4) Venue

Generally, where the plaintiff or defendant resides, at plaintiff’s election; or where the cause of action arose. For corporations, use the registered principal office/business address.

5) Parties and representation

Natural persons appear without a lawyer.
Corporations/partnerships appear through an authorized representative with a board/partner resolution and government-issued ID.
Lawyers may not appear as counsel in small claims (except when they are parties).

6) Pleadings and evidence

Statement of Claim (verified) using the prescribed small claims forms, attaching:
- Credit card agreement or terms and conditions (or issuer’s standard contract with proof of assent/issuance)
- Itemized statements of account and transaction history
- Demand letters and proof of receipt (or proof of attempted service)
- Affidavits and business records; photocopies are admissible subject to authentication rules for small claims
Response: Defendant files the prescribed Answer/Response form with supporting documents and any small-claims-qualified counterclaim.
Prohibited pleadings: Motions to dismiss (except for very limited grounds), motions for bill of particulars, motions for new trial, petitions for relief, and motions for reconsideration of the judgment, among others, are not allowed.

7) Hearing and judgment

The court immediately calendars the case; mediation/settlement is attempted.
The judge proceeds to informal hearing; strict technical rules of evidence do not apply.
Judgment is rendered quickly (often within the day or shortly after hearing), on the same set of documents and brief testimony.
Finality: Judgment in small claims is final, executory, and unappealable. Only extraordinary remedies (e.g., certiorari for grave abuse of discretion) may be explored in narrow, exceptional situations.

8) Costs and fees

Lower filing fees and streamlined service (courier, electronic, or other court-authorized modes).
Attorney’s fees are generally not recoverable as counsel cannot appear; however, contractual penalties or collection charges expressly stipulated may be awarded against the debtor if proven and not unconscionable. Courts scrutinize usurious-like or oppressive charges.

9) Execution

Upon motion, the court issues a writ of execution; sheriff may garnish bank accounts, levy personal property, and implement other post-judgment measures (including examination of judgment debtor).

C. Regular Civil Action for Credit Card Debt

Choose this route when:

The principal claim exceeds the small claims cap; or
You need relief or procedural tools unavailable in small claims (e.g., extensive discovery, complex evidence, third-party complaints, legal issues that require fuller proceedings).

1) Where to file

Up to ₱2,000,000 (principal only) → First-Level Courts.
Over ₱2,000,000 → RTC.

2) Procedure highlights

Lawyer representation allowed.
Complaint with full annexes (contract, statements, demands).
Service of summons through sheriff/substituted/electronic modes per updated rules.
Case management: pre-trial, mediation, judicial dispute resolution where applicable.
Evidence: full Rules on Evidence apply (though courts actively manage proceedings to avoid delay).
Reliefs: You may seek interest, penalties, damages, and attorney’s fees (subject to proof and reasonableness), and avail of preliminary remedies (e.g., attachment) when warranted.

3) Appeals

Judgments are appealable (MTC → RTC → CA/SC as the case may be), unlike small claims.

D. Substantive Issues Often Intersecting with Jurisdiction

Prescription
- Actions upon a written contract: 10 years from breach (typically counted from default or failure to pay after demand, depending on terms).
- If the issuer pleads an open and running account without a specific written promise, shorter periods may be argued; issuers usually rely on the written cardholder agreement to avail of the 10-year period.
Proof of indebtedness
- Card issuer must show existence of the contract and amount due. Monthly statements of account, merchant slips (or electronic logs), and affidavits of custodians of records are standard.
- Unauthorized charges defenses require timely dispute notices and evidence of card compromise; issuers often invoke risk-allocation clauses (e.g., liability until timely report of loss).
Interest and charges
- Courts test for reasonableness and may reduce unconscionable interest, penalties, or fees (even if stipulated).
- For jurisdictional amount, remember: exclude these add-ons when deciding small claims eligibility or court level.
Demand and default
- While extrajudicial demand is not a universal precondition to sue, card contracts commonly require it for acceleration and may affect interest/penalty accrual and computation dates.
Data privacy and bank secrecy
- Pleadings and evidence should respect privacy rules; however, submission of the debtor’s own account records to court to prove the claim is within statutory and jurisprudential allowances.

E. Choosing Between Small Claims and Regular Civil Action

Use Small Claims if:

The principal is within the current cap;
You want speed, lower cost, and finality;
The documentary trail is clear and you don’t need extensive discovery or complex remedies.

Use Regular Civil Action if:

The principal exceeds the small claims cap;
You seek attorney’s fees/damages and anticipate contentious factual issues;
You need appealability and full procedural tools.

F. Step-by-Step Checklist (for credit card plaintiffs)

Compute the principal (exclude interest/penalties/fees).
Check the current small claims cap (cap is set by Supreme Court circulars and has changed over time).
Pick the forum:
- If within cap → Small Claims before the proper first-level court.
- If above cap but ≤ ₱2,000,000 → Regular action in a first-level court.
- If > ₱2,000,000 → Regular action in the RTC.
Prepare evidence: contract, SOAs, demands, affidavits, IDs/resolutions for corporate representation.
File using prescribed forms (for small claims) or a complaint (for regular actions).
Plan for enforcement (post-judgment garnishment/levy).

G. Common Pitfalls

Counting interest/penalties in the amount sued upon for jurisdiction—don’t.
Splitting claims to fit the small claims cap—prohibited.
Suing the wrong defendant (e.g., supplementary cardholder vs. principal per contract).
Insufficient proof of delivery/receipt of statements or demand notices when they matter under contract terms.
Overlooking venue and corporate authority requirements for representatives.
Assuming appeal is available from small claims—it isn’t.

H. Quick Comparison Table

Feature	Small Claims	Regular Civil Action
Court	First-level courts	First-level courts (≤ ₱2,000,000); RTC (> ₱2,000,000)
Jurisdictional Amount	Up to the small claims cap (principal only; cap set by SC circulars)	Amount-driven; venue & court level per ₱2,000,000 line
Lawyers	Not allowed (unless a party)	Allowed
Pleadings	Prescribed forms; limited motions	Full pleadings; motions allowed
Evidence	Simplified; affidavits & documents	Full Rules on Evidence
Timeline	Expedited; judgment quickly issued	Longer; full pre-trial/trial
Appeal	None (final and executory)	Yes (per Rules of Court)
Costs	Lower	Higher (generally)
Best for	Clear, document-driven, modest claims	Complex or high-value claims

Final Notes

The small claims peso cap has been raised multiple times and may differ by location in certain iterations (e.g., Metro Manila versus elsewhere). Always confirm the current ceiling in force at the time of filing.
Regardless of track, the principal-only rule for computing jurisdiction is the anchor: exclude interest, penalties, attorney’s fees, and costs.
For most credit card suits, small claims often offers the fastest, most economical path to judgment—if your principal fits under the then-current cap.