INDONESIA - REGULATIONS - Credit card interest rate and fee must be detailed: BI

JAKARTA: Bank Indonesia requires credit card providers to be transparent in setting interest rate and charging fee to customers, following complaints from cardholders.

The revised regulation on payment using card states that providers must give clear details on interest rate and fee charged to customers in credit card application.

“Credit card providers must give explanation on interest rate and fee that is easy to understand for their customers. They should give explanation using diagram if necessary,” said Bank Indonesia Director of Accounting and Payment System Ronald Waas. (source)

Most complaints sent to Directorate of Banking Investigation and Mediation in Bank Indonesia reveal that customers are disadvantaged on the fee charged by credit card providers, he said.

The customers feel disadvantaged because they receive incomplete information when applying for credit card. “Some terms are written in tiny font, so customers ignore to read them,” he said.

Concerning interest rate, the central bank also gives more details in the calculation process, such as the number of days in a year is set at 365. “Interest is calculated when merchant posts the billing to the bank providing credit card,” he explained.

The central bank sets the maximum interest rate of credit card at 3% every month. Ronald mentioned that only the principal could be charged with interest rate by banks. “Interest rollover is not allowed. Other fees, such as stamp and penalty must not be charged with interest.”

Besides asking for bank transparency, the central bank also requires credit card providers to disclose information on the ownership of credit card and transaction to other providers.

According to the regulation, customers with income below IDR10 million may have credit cards from not more than two providers. (20) (t04/msw)

Source : http://en.bisnis.com/articles/credit-card-interest-rate-and-fee-must-be-detailed-bi  - Nov 9, 2011