Usually, banks, as credit card issuers, determine the credit standing and financial capacity of the cardholder before it extends a certain credit limit. Once the credit card is issued, the bank may implement changes in the credit limit based on their risk management policies and guidelines, subject to the following conditions:

1. The cardholder must be notified of these changes;
2. The credit limit increase may be declared by the cardholder;
3. The cardholder hast he option to request for a credit limit adjustment once he submits an updated information, subject to the approval of the bank, as the credit card issuer (Section 9 of RA 10870 and Section 312 of Manual of Regulations for Banks)

In the case of Spouses Rainier Yulo and Juliet Yulo vs. Bank of the Philippine Islands, GR NO. 217044 dated January 16, 2019, the Supreme Court held emphasized that banks have the burden of proving a credit card holder’s consent. It held:

“When issuing a pre-screened or pre-approved credit card, the credit card provider must prove that its client read and consented to the terms and conditions governing the credit card’s use. Failure to prove consent means that the client cannot be bound by the provisions of the terms and conditions, despite admitted use of the credit card.”

It is important to note that the relationship of bank, as credit card issuer, and the credit card holder is one of contract. This means that parties are bound by the terms and conditions found int he credit card membership agreement. Should either party commit a breach of contract, the injured party may file for moral damages if fraud or bad faith were attendant (BPI Express Card Corporation vs. Ma. Antonia R. Armovit, GR No. 163654)

Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. Malice or bad faith does not need to be intentional. Negligence may be so gross that it amounts to malice or bad faith.

In the case of BPI Express Card Corporation vs. Ma. Antonia R. Armovit, GR No. 163654 dated 8 October 2014, BPI summarily cancelled Armovit’s credit card on the ground of failure to pay her outstanding obligations. After paying, BPI still required Armovit to submit a new application in order to lift the suspension of her credit credit. The Supreme Court ruled in favor of Armovit by pointing out that:

“Terms and Conditions Governing the Issuance and Use of the BPI Express Credit Card does not show that the defendant needed to submit new application as an antecedent condition for her credit card to be taken out of the list of suspended cards. Similarly, BPI Express Credit’s letter did not clearly and categorically inform the defendant about this requirement. It only raised doubt as to whether the requirement had really been a pre-condition or not.”

Here, the main consideration for the ruling was the contractual nature of the credit card agreement. As there was nothing that shows a requirement to submit a new application, BPI cannot compel Armovit to file one as it was not stipulated as a pre-condition to reviving Armovit’s credit card. Thus, it cannot be said that Armovit consented to such procedure.