How To Apply For The Credit Card Amnesty Program In The Philippines7 min read
Did you know that banks offer a credit card amnesty program that can save you from ballooning card debt?
For people who have unpaid credit cards, the Credit Card Association of the Philippines (CCAP) can help you.
The organization provides a feasible credit card payment method for people to finally settle their credit card obligations once and for all through its Inter-bank Debt Relief Program (IDRP).
- What is credit card amnesty program
- Who can apply for the credit card amnesty program
- What are the requirements for the credit card amnesty program
- How to apply for the credit card amnesty program
- What areâ€¯the effects of a successful application?
- What will be the interest and terms of payment?
- Can I pre-terminate or cancel the agreement?
- Can I apply for a credit card after Iâ€™ve fully settled by obligations?
- What happens to my account if I missed my payments?
- Will I be able to reapply for IDRP when my application gets rejected?
- Can you be jailed for credit card debt in the Philippines?
What is the Credit Card Amnesty Program?
The IDRP is designed to provide aid to the credit cardholders who need it most. With the help of this program, delinquent credit card holders in the Philippines with huge debt can avail of a friendlier debt restructuring program that will help them get back at their feet.
The agencyâ€¯saysâ€¯the purpose of the said scheme is to help â€œhighly indebted and financially distressed (but well-meaning) customers get back on track toward responsible credit use.â€
Also, the IDRP will serve as a rehabilitation program for financially distressed customers who highly deserve a second chance. Through the effort of the Bangko Sentral ng Pilipinas (BSP), CCAP, Banco De Oro (BDO) and IDRP, those who will be granted amnesty will enjoy more affordable terms, lower interest rates, and a reduction in the equal monthly amortization enabling them to sustain paying for the account and prevent further delinquency.
Who can apply for the credit card amnesty program?
The CCAPâ€™s debt restructuring program is not for everyone; itâ€™s intended to help only the most deserving people with huge credit card debts.
Youâ€™re eligible for the said scheme if you meet the following criteria:
- Customers should have at least one credit card from two participating banks.
- Credit card accounts must be at least six months old with an outstanding balance of at least P10,000 per card and with total combined obligations of at least P100,000 with all card issuers.
- Customer is not allowed to apply on a selective basis. The applicant should declare all credit card outstanding balances. Validation will be done through credit bureau information and/or confirmation from CCAP member banks.
- Customers may be required to submit proof of financial distress or an indication of a card payment difficulty.
- The Combined age of the customer and end of the tenor of the restructured accounts must not be more than 65 years. Otherwise, a co-maker/guarantor is required. A co-maker is also mandatory if the customer has no source of income or if the current income is not sufficient to cover the monthly amortization of the restructured accounts. The financial status of the co-maker/guarantor will also be assessed.
- The banks have an option to disapprove applications due to moral hazard and if the customer has shown abusive and irresponsible usage of credit cards. The nature and types of transactions will be reviewed.
- Banks may disapprove the application if it is seen that the card was used for the purchase of luxury items, extensive travel, and/or gambling related use.
- The customer has not previously applied for the same program in the last six months.
- The customer has not filed legal actions such as Petition for Insolvency or Rehabilitation.
What are the requirements for the credit card amnesty program?
To avail of the better credit card payment scheme offered by the IDRP, interested credit cardholders must accomplish and submit the following:
- A completely filled-up application form.
- Statement of income and expenses.
- ITR or last three monthsâ€™ payslip or COE (if employed), latest ITR or audited FS (for self-employed). If the applicant has no source of income, he/she will need to find a co-maker who can help him/her pay for the amortization monthly. The co-maker will also need to sign an agreement.
- Proof of other sources of income.
- IDRP Payment Agreement Contract including Terms & Conditions signed by applicant and the co-maker, as applicable.
- Debtorâ€™s Consent Form, Promissory Note, or Post-Dated Checks.
- One valid government ID including that if the Co-Maker if required.
How to apply for the credit card amnesty program
To apply for the amnesty program, you can directly call your issuing bank. For multiple cardholders issued from different banks, the card company bearing the largest total outstanding balance will be in charge of handling your request.
To initiate the process, you will receive a call from the representative of the facilitating bank.
What are the participating banks for this program?
Cardholders can avail of the IDRP if they have credit card debts from the following banks:
- Asia United Bank (AUB)
- Bank of Commerce
- Bank of the Philippine Islands (BPI)
- BDO Unibank, Inc. (BDO)
- China Banking Corporation
- EastWest Banking Corporation
- Equicom Savings Bank
- Hongkong and Shanghai Banking Corporation Ltd. (HSBC)
- Citibank, N.A. Philippine Branch
- Maybank Philippines, Inc.
- Metrobank Card Corporation
- Philippine National Bank (PNB)
- Rizal Commercial Banking Corporation (RCBC)
- Standard Chartered Bank
- UnionBank of the Philippines
What areâ€¯the effects of a successful application?
Once your application for IDRP has been green-lit, the following will occur:
- All credit card privileges with all banks, whether current or delinquent, will be canceled, and all accounts shall be included in the program.
- All rewards, rebates, miles earned will be forfeited.
- New applications for credit card will not be entertained while there are accounts still enrolled in the program. The customer has to fully pay or complete the program before he/she can apply for a new card.
- The names of all approved applicants that will avail of the IDRP shall be included in the files maintained by Credit Bureau and CCAP, which are being used by financial institutions for credit evaluations and decisions.
- The bank may also impose its right to offset any amount due and payable against the primary debtorâ€™s deposit account with the primary creditor if there is any. Only the remaining balance after the offset shall be applied under the IDRP.
What will be the interest and terms of payment?
Each successful applicant will be assessed individually, so depending on their outstanding debt as well as their current financial capability, they will get a term best suited for their needs.
The interest rates can be as low as 0% and have a ceiling of up to 1.5%. Meanwhile, terms of payment can range between 12 and 60 months and, in extreme cases, can go up to 10 years.
Can I pre-terminate or cancel the agreement?
A customer can pre-terminate his enrollment to the IDRP by paying the remaining consolidated balance from all the banks.
Can I apply for a credit card after Iâ€™ve fully settled by obligations?
Once a person has fully paid his debt via the IDRP, he can apply for a new credit card. However, approval is subject to the personâ€™s financial soundness and capability.
According to the CCAP, the recommended gap between completing repayment andâ€¯applying for a new credit cardâ€¯should be at least 12 months or six months if the account is paid ahead of schedule.
What happens to my account if I missed my payments?
When you miss your amortization for two consecutive months, any arrangement under the IDRP shall be canceled and nullified and the account will be considered a default. This also means that defaulting in the program means defaulting all the banks involved where the customer has an account.
Aside from being banned from future applications for IDRP, the customer may also suffer from accelerated collection action from the credit card issuers.
Will I be able to reapply for IDRP when my application gets rejected?
When your application for IDRP has been denied, you may reapply again after six months. Meanwhile, credit cardholders who get rejected may also consult their respective issuers for bank-specific debt restructuring programs.
Can you be jailed for credit card debt in the Philippines?
No. Failure to pay credit card debts is only considered a civil offense as per Article III, Section 20 of the Philippine Constitution.
(This article was written on July 17, 2016, and updated on Feb 24, 2020)