The nation’s 12 credit and cash card issuers yesterday reached a consensus on the Financial Supervision Commission’s (FSC) call to lower the interest rate on revolving credit by a minimum of 1.25 percentage points, the commission said yesterday.
The proposal to trim interest rates on revolving credit will apply to cardholders who have paid their bills regularly and who have not violated any credit rule, the commission said in a statement.
The commission estimated that the proposal would benefit 8 million cardholders, 1.3 million of whom have activated their revolving credit and have been paying an average 14 percent revolving interest rate.
The rate, however, could climb up to 20 percent.
The banks have agreed to complete their billing system before Feb. 15, the commission said.
The 12 banks include Citibank Taiwan Ltd (台灣花旗), Chinatrust Commercial Bank (中國信託銀行), E. Sun Commercial Bank (玉山銀行), Cathay United Bank (國泰世華銀行) and ABN AMRO Bank.
In addition, the banks agreed to review cardholders’ credit risk on a quarterly basis, instead of on a bi-annual basis as was done previously, to reflect the series of benchmark rate cuts by the central bank in recent months.
As of the end of November, the outstanding amount of revolving credit totaled NT$258 billion, down 2.6 percent from October, the commission’s data showed.