Monday, March 05, 2007
Traders to reject most credit cards
Bad news for credit card holders. If businesses will have it their way, stores will no longer honor most credit cards as businessmen are considering banding together in order to fight the high loan surcharges imposed by credit card companies. Businesses are hurting because retailers are expected to absorb the loan costs charged by credit card companies. This is due to the order of The Department of Trade and Industry (DTI) has issued Administrative Order (AO) 10 Series of 2006, which states that it is illegal for retailers to impose loan surcharges on credit card and loan purchases.
The law AO 10, which took effect November 5, 2006 metes out prison time and fines against violators. It requires every retailer to display only one tag to indicate the price of each product or service. The order bans the use of two price tags, one indicating a cash price and another designating a card price, for the same product or service.
The Philippine Retailers Association has earlier asked the DTI to reconsider the implementation of the said order. Businesses will join forces and boycott credit card companies that have high loan surcharges. They will band together and do business with one or two credit card companies only in which one of the credit card was identified as the Bank of the Philippine Islands (BPI) because, according to the Philippine Retailers Association, they are one of the most efficient card company, the most sensitive and most fair to businesses. This is probably because BPI has its own system and uses in house technology therefore the credit card’s operating costs is not as high as the other banks.