Bankard launches new credit card

Bankard and JCB International launched recently a new credit card which is said to offer the lowest monthly revolving interest rates.

Called myDream JCB Card, Bankard said it would be charging a revolving interest rate of 2.5 percent per month against an average 3.25 percent assessed by the rest of the credit card industry.

However, the application of the value added tax (VAT) could force the interest rate to at least 2.75 percent per month.

"The VAT would force card companies to pass on the cost of taxation to the customers," said Joven D. Reyes, president and chief executive officer of Bankard, a subsidiary of the YGC Company.

Reyes said card companies would also be forced to spend a "considerable amount" in administrative costs. "And we are still unclear just what kind of transactions would be covered by the new tax form," he added.

The Bankard chief executive said credit card companies prefer to exist within the five-percent gross receipts (GRT) than the 10-percent VAT.

The credit card company of the Yuchengco group registered last year a net income of P84 million lower by 28.8 percent than the P118 million registered in 2001. Company officials explained that last year marked a period of "cleansing" and consolidation which resulted in the reduction of cardholders from a reported high of 500,000 to a prudent although reliable 270,000 at the start of 2003.

‘We had to remove the inactive and delinquent accounts, and retain the reliable customers," Reyes pointed out.

Within the next five years, Bankard hopes to sustain a card base of 770,000 or an average growth of 100,000 new clients yearly.