The Central Bank will eliminate the limit on the total cost of a credit card loan

According to him, the PSC limit is now 292% annually or 1/3 of the excess over the market average two quarters earlier. The restriction will remain for other types of loans, except mortgages, as well as for all loans from microfinance organizations, consumer credit cooperatives and pawnshops.

The Central Bank made the decision to cancel the limit due to the incorrect calculation of the PSC for credit cards by several large banks, as a result of which the average market value of the PSC for the third quarter of 2024 was underestimated. Since the maximum PSC level for the first quarter of 2025 depends on this value, “the limitation could lead to a reduction in the availability of cards for citizens,” explained the Central Bank.

In October, the regulator required banks to calculate the total cost of the loan based on the maximum possible amount of payments by the borrower. The Central Bank said that some banks offer a promotional period for credit cards with minimum rates, which then increase significantly. At the same time, they calculate the PIC based on the rates in force during the grace period.

“This calculation of the PSC contradicts the provisions of the Law “On Consumer Credit (Loan)”, misleads borrowers and the lender must determine the total cost of the loan based on the borrower’s maximum payments that are valid outside the period promotional,” said the Bank of Russia.

The Central Bank informed the banks about the inadmissibility of such practices, sent them instructions on the need to eliminate violations and switch to the correct methodology for calculating the PIC.