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Paying credit card interest is a choice. Here’s how to choose not to

Sep 22, 2026 · 2 min readBy KasKasan Buddies

Paying only the minimum on a credit card can leave balances growing through interest, while paying in full or reducing the balance faster can lower costs.

  • Most Filipinos do not know this, but the interest on your credit card is completely avoidable.
  • Here’s what is actually happening every time you pay just the minimum:
  • Under BSP Circular No. 1165, your bank can charge up to 3% per month (36% per year) on your unpaid balance. That is the current BSP cap.

Paying only the minimum on a credit card can leave balances growing through interest, while paying in full or reducing the balance faster can lower costs.

  • Most Filipinos do not know this, but the interest on your credit card is completely avoidable.
  • Here’s what is actually happening every time you pay just the minimum:
  • Under BSP Circular No. 1165, your bank can charge up to 3% per month (36% per year) on your unpaid balance. That is the current BSP cap.

Most Filipinos do not know this, but the interest on your credit card is completely avoidable.

Here’s what is actually happening every time you pay just the minimum:

Under BSP Circular No. 1165, your bank can charge up to 3% per month (36% per year) on your unpaid balance. That is the current BSP cap.

With a ₱10,000 balance:

📌 3% monthly interest = ₱300 charged to your account 

📌 Minimum payment = roughly ₱300 (3% of balance)

📌 Result: Your entire minimum payment goes straight to interest. Your balance does not move.

That is ₱300 paid. ₱0 off your actual debt. Every single month.

The good news? This trap is 100% avoidable.

✅ Pay your full statement balance every month. Zero interest. Every time. That ₱300 charge never applies to you.

✅ Cannot pay in full right now? Pay as much as you can above the minimum. Every extra peso reduces your balance and the interest you get charged next month.

✅ Already carrying a high balance? A balance transfer to a lower-rate card can cut what you pay in interest right now.

💡 The 3% cap is the maximum. The minimum you can pay in interest is zero. You get to choose which one applies to you.

Download the KKB App to compare credit cards with the lowest rates and find balance transfer options. 👇

https://www.kaskasanbuddies.com.ph/download?source=web

Source: BSP Circular No. 1165, Series of 2023. RA 10870 (Philippine Credit Card Industry Regulation Law). Current cap: 3%/month (36%/year). The cap is subject to BSP review every 6 months. Verify the current rate with your bank.