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How to Qualify for the Credit Card Amnesty Program in the Philippines

5 March 2022
How to Qualify for the Credit Card Amnesty Program in the Philippines

While using a credit card enables you to buy things on credit, you will get a monthly statement detailing the financial commitment you have to pay with your credit card. Credit cards provide several advantages, including the ability to make purchases ahead of time before monthly income is received and the ability to build up a positive credit history and score. The owner of a credit card, on the other hand, may find themselves in trouble if they abuse their card.

 

Know more about Credit Card Amnesty Program in the Philippines and debt restructuring program for credit cardholders.

Know more about Credit Card Amnesty Program in the Philippines and debt restructuring program for credit cardholders.

Unpaid Credit Card Debts in the Philippines

 

What happens if you don't pay your credit card debts? In the event that you do not pay your credit card bill on time, the following are likely to happen to you:

  • To remind you of your outstanding credit card amount, the bank will send you a written letter.

  • A third-party collection agency will be assigned to collect your late credit card bill. Calls from a collection agency will be made to encourage you to pay back the money that you owe.

  • Your credit rating and future loan and credit card applications will be negatively impacted if you fail to pay off your credit card debt.

 

We know that many credit card holders are asking this question: Can I be jailed for credit card debts?

 

Well, the answer here is no. If you don't pay your credit card bills, you won't go to prison in the Philippines because of this. Unpaid credit card bills are solely treated as a civil matter, not as a criminal offense. Article III Section 20 of the Philippines Constitution declares that "no individual shall be imprisoned for debt." Credit card debt lawsuits are conceivable in the Philippines if the fraudulent use of a credit card occurs. This is the only time that criminal charges and a prison sentence may be brought against you if you do this.

 

In other words, if you keep receiving phone calls from credit card officials threatening you with prison, don't freak out and run for cover. As a consumer, you are protected by the law. In addition, collection companies are barred from using unfair practices and inhumane methods to recover debts.

 

Dealing with Credit Card Debt Collectors as per Credit Card Association of the Philippines

As per Credit Card Association of the Philippines or CCAP regulations, debt collectors are not authorized to intimidate you, your image, or your property. Many of them do this over the phone or over text and email in order to make you agitated, terrified, or worried enough to pay.

 

Section 7 of BSP Circular 454 prohibits banks, credit card firms such as subsidiaries or affiliates, debt collection agencies, attorneys, and agents in the Philippines from doing the following actions while collecting payments for delinquent credit cards:

  • Using violence to harm a person, their name, or their property

  • Use slurs or foul words to express their feelings.

  • The identities of credit cards that are believed to have defaulted on their payments be made public.

  • Intend to engage in illegal or unethical behavior

  • Do not disclose debt issues or provide incorrect credit information.

  • Convince credit cardholders to hand up their personal information or settle their bills by using fraudulent tactics.

  • At no time they should attempt to contact the credit cardholder after 10 p.m. or before 6 a.m. unless payment is more than 60 days past due.

 

If ever you encounter these kinds of experiences, make sure to seek their permission to record all your phone conversations and to document your email and text interactions if you ever come across a debt collector that does this to you.

 

Your bank should also be notified of any unfair debt collection methods that you've encountered. In this manner, it may take action against its collecting agencies' unethical practices or rules of engagement.

 

Introducing the Credit Card Amnesty Program in the Philippines

 

If you are one of those people who find themselves in trouble due to the credit card debt they haven't paid off in a while, don't be nervous as you can take advantage of the Philippines' credit card amnesty program to alleviate your debt burden and get your life back on track.

 

Debtors who have not made payments on their credit cards may take advantage of this program, which offers them a reduced interest rate and an extended payback period. In this way, fortunately, you may regain control of your money and raise your credit score.

 

What is Interbank Debt Relief Program?

The Bangko Sentral ng Pilipinas, along with Banco de Oro and CCAP member-banks offer a debt restructuring program called the Interbank Debt Relief Program or IDRP to enable credit card customers who have late debts to pay their outstanding balances.

Using the IDRP, you can combine your credit card obligations and rearrange your repayment schedule. Amnesty programs in the Philippines provide reduced monthly payments and lower interest rates for those who want to get rid of their credit cards.

There is a maximum interest rate of 1.5 percent for all credit card accounts, which means that a debtor will have more time to pay off their debts as long as 10 years. It's easier to pay off your credit card obligations this way. Furthermore, it won't harm your credit.

A debt amnesty program in the Philippines may help you pay your debts. In order to qualify, you must have at least Php 10, 000 in outstanding credit card debt per card and Php 100, 000 in total credit card debt across all of your accounts.

In the event that your bank participates in this amnesty program, you may submit all of the necessary paperwork and wait for clearance. Just be reminded though that using your credit card for any form of purchase is now prohibited, regardless of whether it is active or delinquent.

Below are the credit card debt restructuring features:

  • Interest rates as low as 0% to 1.5%.

  • Repayment periods of 12 to 16 months. This can be extended up to 10 years for huge credit card debts.

  • All unpaid credit card accounts get the same interest rates and payback timeframes.

 

Lists of Banks that Provide Credit Card Amnesty Program in the Philippines:

  • AUB

  • Bank of Commerce

  • BDO

  • BPI

  • China Bank

  • Citibank

  • EastWest Bank

  • Equicom Savings Bank

  • HSBC

  • Maybank

  • Metrobank

  • PNB

  • Rizal Commercial Banking Corporation (RCBC)

  • Security Bank

  • Standard Chartered Bank

  • UnionBank

 

Credit Card Amnesty Eligibility

There are only certain credit cardholders in the Philippines who are eligible for credit card debt restructuring. Only those who could match the IDRP's stringent criteria may apply for the credit card amnesty program:

  • Only Filipino cardholders are eligible.

  • At least one credit card is required from two of the participating banks.

  • An overdue credit card bill of more than Php 100, 000 has been in existence for at least six months with at least Php 10, 000 balance on each card.

  • For restructured credit card accounts, a person's age and the length of the payback period must not exceed 65 years.

  • If the applicant is above the age of 65, has no source of income, or has inadequate money to meet the monthly amortization, a co-maker or guarantor is necessary.

  • No new IDRP application has been submitted in the last six months.

  • Absolutely no reckless or abusive use of a credit card such as for gaming or luxuries and absolutely no extravagant or extensive travel.

 

Credit Card Amnesty Application

 

1.      Apply for IDRP credit card debt restructuring by contacting your credit card provider.

In the event that you have numerous credit cards from various banks, your credit card amnesty application will be processed by the credit card issuer with the largest aggregate outstanding balances. In order to answer any questions you may have, a representative from your bank of choice will get in touch with you.

 

2.      Submit the IDRP document requirements.

Application for a credit card amnesty must include the following documents:

  • An application form that has been completed.

  • Applicants and co-creators must provide government-issued ID (if required)

  • Income and Expenses Statement

  • Proof of income: The latest three months of payslips or a tax return, if you're working (ITR) or the most recent ITR or audited financial account for self-employed candidates.

  • There must be evidence that you have alternative sources of income.

  • Application and Co-Maker IDRP Payment Agreement Contract (if applicable)

  • Post-dated cheque, promissory note, or a debtor's consent form.

 

3.      Declare all your outstanding credit card balances

Credit card debt amnesty under the IDRP requires you to disclose every outstanding amount on your credit cards. A particular credit card account cannot be applied for as an isolated case.

 

4.      Approval of your credit card amnesty

You may pay your monthly amortization straight to the issuing bank, or any other bank or payment center after you have been accepted for credit card amnesty. Also, make sure to set your expectations with this kind of scenario:

  • You will lose access to all of your current credit card accounts, whether or not they are overdue. These charges will be blocked and included in the credit card amnesty program by your financial institution. Cash advances can't be used to pay off another credit card, according to the CCAP.

  • You'll also lose all of your credit card perks, rebates, and air miles if you cancel your credit card.

  • Unless you've fully paid your existing credit card debt, you won't be eligible to apply for a new credit card or for a loan.

  • You will be reported to the CCAP and credit bureaus, which lenders use to make credit assessments and choices, and your identity will be stored in their files.

 

Along with this, please take note that your credit card amnesty will be revoked and you will be declared in default if you miss two payments in a row. IDRP has a "default one, default all" policy. This particular policy implies that defaulting with one bank would void the IDRP agreement with the other banks, as well. It's impossible to apply for IDRP again after you've been rejected.

 

Credit card amnesty may be reapplied for after six months if your first application is rejected. Or, you may speak with the customer service department of the card company to learn about any amnesty programs for delinquent credit cardholders settle that they may have.

 

Is it true that a credit card debt is written off in the Philippines after seven years?

Most people believe that if they pay off their credit card obligations within seven years, they would be forgiven. Unpaid credit card balances in the Philippines will not be erased, as is the case in other countries. You owe the credit card companies no matter how long it has been since you made the purchases.

 

A common misconception is that debts are erased from a bank's database after they have been collected for seven years.

 

However, the mere fact that you are no longer being contacted by collection agencies does not indicate that your debts are no longer there. Your former debts may still be collected by debt collection agencies, or they can be declared as "uncollectible accounts." You'll be added to their database of people on their "negative list" if that occurs.

 

Credit card bills should be paid in full as soon as feasible. You'll need to acquire the green light from the bank after you've paid everything off. If you have paid all of your credit card bills, this will be confirmation of it.

 

Know how to pay your credit card balance:
Ways to Pay Off Your Credit Card Outstanding Balances

 

So make sure to pay and settle all your credit card debts on time for your own peace of mind and for you to take advantage of the perks and incentives of having a good credit standing.

 

You can put your hard-earned money to better use if you make a wise investment that can help you to earn a passive income as well, through real property investment.

 

Avail now a house and lot package from Lumina Homes through bank financing and maximize the benefit of having a good credit score by achieving your dream home for your family. Inquire now about our bank financing options and Level Up your investment this 2022 with Lumina Homes.

 

Read more about personal loans and financial institutions at:
Need Cash Assistance? Here are the Types of Bank Loans in the Philippines

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