By October 2014, the credit-card interest rate will drop to less than 16 percent for cardholders who have maintained sound credit and regular payments over the past year, Premier Jiang Yi-huah stated today.
Noting credit-card interest is an issue of great public concern, the premier said the Financial Supervisory Commission (FSC) has made policy adjustments and demanded card issuers to take the initiative to lower qualifying cardholders' interest rates by the designated deadline.
It is estimated that more than 3.5 million cardholders will benefit from the measure and their total interest burden could be reduced by approximately NT$800 million (US$26.5 million), noted the premier, who made these remarks at the Cabinet meeting today after being briefed by the FSC on its supervisory policy adjustments of credit card business operations to enhance consumer protection.
To reduce cardholders' financial burdens, Premier Jiang enjoined the FSC to continue to oversee card issuers to ensure they thoroughly implement tiered pricing of interest rates and are scrupulous in approving an appropriate interest rate for each cardholder. As for cardholders who opt for revolving credit on a long-term basis, a card issuer shall take the initiative to offer cardholders options on lower-interest credit loans or installment payments.
The premier also asked the FSC to strengthen consumer education and advocacy on finance so that consumers can make good use of financial instruments for loans or consumption.
The FSC stated it will adjust the calculation method for due minimum payment; meanwhile it will also shorten the time period for revolving credit to reduce consumers' interest burdens. These adjustments shall go into effect July 1, 2015 on all credit-card payments, and in order to take into consideration current cardholders' financial burdens, these changes shall not be retroactive.