§ X320.
1 Definition of terms
a. Credit card. Means any card, plate, coupon book or
other credit device existing for the purpose of obtaining
money, property, labor or services on credit.
b. Credit card receivables. Represents the total
outstanding balance of credit cardholders arising from
purchases of goods and services, cash advances, annual
membership/renewal fees as well as interest, penalties,
insurance fees, processing/service fees and other
charges.
c. Minimum amount due or minimum payment required.
Means the minimum amount that the credit cardholder
needs to pay on or before the payment due date for a
particular billing period/cycle as defined under the
terms and conditions or reminders stated in the
statement of account billing statement which may
include:
(1) total outstanding balance multiplied by the required
payment percentage or a fixed amount whichever is
higher;
(2) any amount which is part of any fixed monthly
installment that is charged to the card;
(3) any amount in excess of the credit line; and (
4) all past due amounts, if any.
d. Default or delinquency. Shall mean non-payment of,
or payment of any amount less than, the “Minimum
Amount Due” or “Minimum Payment Required” within
two (2) cycle dates, in which case, the “Total Amount
Due” for the particular billing period as reflected in the
monthly statement of account may be considered in
default or delinquent.
e. Acceleration clause. Shall mean any provision in the
contract between the bank and the cardholder that gives
the bank the right to demand the obligation in full in
case of default or non-payment of any amount due or for
whatever valid reason.
f. Subsidiary refers to a corporation or firm more than
fifty percent (50%) of the outstanding voting stock of
which is directly or indirectly owned, controlled or held
with the power to vote by a bank or other FI.
g. Affiliate refers to an entity linked directly or indirectly
to a bank or other FI through any one or a combination
of any of the following:
(1) Ownership, control or power to vote, whether by
permanent or temporary proxy or voting trust, or other
similar contracts, by a bank or other financial institution
of at least ten percent (10%) or more of the outstanding
voting stock of the entity, or vice-versa;
(2) Interlocking directorship or officership, except in
cases involving independent directors as defined under
existing regulations;
(3) Common stockholders owning at least ten percent
(10%) of the outstanding voting stock of each FI and the
entity; or
(4) Management contract or any arrangement granting
power to the bank or other FI to direct or cause the
direction of management and policies of the entity, or
vice-versa.
h. Simple annual rate is the uniform percentage which
represents the ratio between the finance charge and the
amount to be financed under the assumption that the
loan is payable in one (1) year with single payment upon
maturity and there are no upfront deductions to
principal. For loans with terms different from the above
assumptions, the effective annual interest rate shall be
calculated and disclosed to the borrower as the relevant
true cost of the loan comparable to the concept of simple
annual rate. For loans with contractual interest rates
stated on monthly basis, the effective interest rate may
be expressed as a monthly rate. In accordance with the
PAS definition, effective interest rate is the rate that
exactly discounts estimated future cash flows through
the life of the loan to the net amount of loan proceeds.
For consistency, methodology and standards for
discounted cash flow models shall be prescribed to be
used for the purpose.
i. Credit card acquirer- refers to the institution that
accepts and facilitates the processing of the credit card
transaction which is initially accepted by the merchant.
j. Credit cardholder- refers to a person who owns and
benefits from the use of a credit card.
k. Credit card business activity report - report which
contains the quantitative data on credit card industry.
l. Credit card issuer- refers to a bank or a corporation
that offers the use of its credit card.
m. Pre-approved credit cards are unsolicited credit cards
issued by credit card issuers to consumers who have not
applied for such credit cards. Acts described under
Appendix 103 and other similar acts are deemed
tantamount to the act of issuing preapproved credit
cards, notwithstanding any contrary stipulations in the
contract.
n. Application is a documented request of the credit card
applicant to a credit card issuer for the availment of a
credit card. The intention and consent for the availment
of the credit card must be clear and explicit.
(As amended by Circular Nos. 845 dated 15 August 2014,
812 dated 23 September 2013 and 754 dated 17 April
2012)