Regulators capped credit card interest rates. Here's what changes if you carry a balance.

Originally reported as: “BSP caps credit card interest rate ceiling amid high consumer debt concerns”

The central bank set a ceiling on the interest rate credit card issuers can charge on unpaid balances, aiming to ease the burden on cardholders who carry debt from month to month. Credit card interest, sometimes called a finance charge, only applies to a balance that isn't paid in full by the due date, since paying everything off during the grace period avoids interest entirely. The cap lowers the maximum rate banks can charge on that unpaid portion, which should mean smaller finance charges for people who typically carry a balance. It doesn't erase other costs like late payment fees or annual fees, and it doesn't change the fact that only paying the minimum due lets interest keep compounding on what's left.