Friday, November 21, 2008

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Ang Terrible nga Interest Rates sa Pilipinas

Posted by jale

In the Philippines, the most common interest rate for credit cards is 3.5%. For Balance Transfer facility, it is 0.88%. For personal loans, it is 1.7%. Doing some financial math, we will find out that its equivalent annual percentage rates are

1.035^12 = 1.511068657…
1.0088^12 = 1.11086397….
1.017^12 = 1.22419735….

that’s 51.1% APR for credit cards

11.1% APR for balance transfers

22.42% APR for balance transfers

I wonder why it should be this big. Is our country’s credit risk that high? In the US, common APR rates play only around 10%, personal loans at 5% APR, while balance transfer rates are almost down to 0% APR. Isn’t it unfair?

Luckily, due to the fierce competition on the country’s local credit card market, some banks has already started offering lower interest rates. Some at 3% monthly interest , others at 2.99%, but the lowest I am aware of is 2.25% (EastWest Bank credit cards). Thanks to that, competition is getting more fierce and soon, other banks will be forced to lower their charges.

But how soon is soon?

We need to act now.
Philippines, petition for a lower interest rates on credit cards!

Please sign to support this movement!

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Comments (1)

	1. 18-08-2008 08:58
	Just make sure dont fall to their trap. Banks are so clever of making money. Registered Report

DoctorWho

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