TCEA on credit cards in Peru: what it is, the legal maximum interest rate, and how you're protected from abusive late fees

The underlying mistake: looking at the “interest rate” instead of the TCEA, and assuming the bank can charge whatever it wants

When someone compares credit cards, they almost always look at a single number: the interest rate shown in the advertising. That number is rarely the card’s real cost, and assuming the bank can set it with no legal ceiling at all is another common mistake. Peru has both pieces: a figure — the TCEA — that does reflect the total cost, and a legal cap on the interest rate the financial system can charge, whose excess can amount to a crime.

This page brings together the two questions that generate the most confusion in practice: what exactly the TCEA is and what information the bank must give you about it, and what the current legal maximum rate is, why it exists, and what concrete protections you have around late payment, the order in which your payments are applied, and increases to your credit line.

What the TCEA actually is (and why the bank must give it to you)

Resolución SBS N.° 8181-2012 defines the Annual Effective Cost Rate with technical precision:

“La tasa de costo efectivo anual (TCEA) es aquella que permite igualar el valor actual de todas las cuotas con el monto que efectivamente haya sido recibido en préstamo. Para este cálculo se incluirán las cuotas que involucran el principal, intereses, comisiones y gastos, que de acuerdo a lo pactado serán trasladados al cliente.”

(“The Annual Effective Cost Rate (TCEA) is the rate that equalizes the present value of all installments with the amount actually received as a loan. This calculation includes installments covering principal, interest, fees and charges that, as agreed, will be passed on to the client.”)

In plain terms: the TCEA isn’t just the interest you’re charged for using the money — it’s the total cost of the operation over a year, everything included: administrative fees, charges, and, for consumer or mortgage credit, even the associated insurance. That’s why it’s almost always higher than the “interest rate” advertised on its own, which typically reflects only the compensatory interest.

The law doesn’t leave this to the bank’s goodwill: Articles 12 and 13 of the same regulation require disclosing the interest rate, the moratory rate and every fee “clearly, explicitly and understandably,” in rate sheets, brochures and the contract itself, before you accept the operation. If you’re comparing two cards from two different banks, the figure that lets you compare like with like is each card’s TCEA — not the interest rate advertised separately.

Can the bank charge whatever it wants? The legal maximum rate, and why exceeding it is a crime

Here’s the most widespread myth: that because it’s a bank, the interest rate is entirely up to it. That’s not the case. The Civil Code already established, back in 1984, that a maximum conventional interest rate exists, set by the Central Reserve Bank of Peru (BCRP):

“Artículo 1243º.- La tasa máxima del interés convencional compensatorio o moratorio, es fijada por el Banco Central de Reserva del Perú. Cualquier exceso sobre la tasa máxima da lugar a la devolución o a la imputación al capital, a voluntad del deudor.”

(“The maximum rate of conventional compensatory or moratory interest is set by the Central Reserve Bank of Peru. Any excess over the maximum rate must be refunded or applied to the principal, at the debtor’s choice.”)

For years there was debate over whether that ceiling also covered banks, or only loans between private individuals. The BCRP’s Organic Law (Decree Law 26123) treats the two situations in separate articles: Article 51 gives the BCRP the power to set maximum rates for “operations outside the Financial System” (loans between individuals, for example). But Article 52, amended in 2021 by Law 31143 — whose very name says it all: “Law that protects financial-services consumers from usury” — extended an equivalent limit to the financial system itself, with a consequence far more serious than a simple administrative infraction:

“Las tasas de interés activas cobradas por encima de ese límite serán consideradas tasas de interés de usura y tipificadas como un delito, siendo de aplicación el artículo 214 del Código Penal.”

(“Active interest rates charged above that limit will be considered usurious interest rates and classified as a crime, applying Article 214 of the Criminal Code.”)

In other words: since 2021, a bank, a finance company or a credit-card issuer that charges an active rate above the BCRP’s maximum doesn’t just commit an administrative infraction — it commits usury, a crime. The SBS has the explicit authority to supervise compliance with that maximum rate and to sanction, and report to the Public Prosecutor’s Office, any entity that exceeds it.

What is that maximum rate today? The BCRP publishes and updates it every six months (in May and in November). For the May-October 2026 period, the maximum compensatory interest rate for financial-system operations is 114.13% effective annual in national currency and 99.84% in foreign currency — a deliberately high figure, designed to catch only the most extreme cases of usury, not to function as a typical credit-card ceiling. The current figure changes every semester, so it’s worth checking it directly on the BCRP’s official page before using it as a reference for a complaint.

On fees, the law sets a different but equally concrete limit: Article 9 of Law 26702, also amended by Law 31143, requires every fee to correspond to a real, additional, actually-provided service, backed by a demonstrable cost and approved by the SBS — it cannot, in practice, be a second charge disguised as interest.

What happens if you pay late: moratory interest yes, an extra penalty no, capitalization never

Another area where charges get applied that the law doesn’t allow is late payment. Article 6 of Law 28587 (Complementary Law to the Consumer Protection Law on Financial Services), also amended by Law 31143, is explicit:

“Está prohibida la capitalización de intereses y el cobro de penalidad u otra comisión o gasto en caso de incumplimiento o atraso en el pago del crédito. Las tasas de interés moratorio serán las mismas que el Banco Central de Reserva establece para las operaciones ajenas al sistema financiero.”

(“Capitalizing interest and charging a penalty or any other fee or expense in the event of default or late payment of the credit are both prohibited. Moratory interest rates will be the same ones the Central Reserve Bank sets for operations outside the financial system.”)

Three concrete rules follow from that. First: if you pay late, the bank can charge you the moratory interest agreed in your contract, but it cannot add an extra “penalty” or other fee on top of the simple delay — that’s no longer moratory interest, it’s a prohibited charge. Second: it cannot capitalize the interest you didn’t pay, meaning it cannot charge interest on accumulated unpaid interest. Third, and perhaps the most curious point: the moratory rate that can be charged to you isn’t the one set under Article 52 for the financial system, but the one the BCRP sets under Article 51 for operations outside the financial system — a different ceiling that, per the BCRP’s current published figures, currently happens to be of comparable size.

How the bank must apply your payment if you don’t pay the full balance (payment allocation order)

If you pay less than your full balance, which part of the debt does that money go toward first? This matters more than it seems: a bank that chooses to apply your payment to the lowest-interest portion of the debt, leaving the more expensive portion untouched, ends up charging you more interest overall. The Credit and Debit Card Regulation (Resolución SBS N.° 6523-2013) bans exactly that:

“El orden de imputación aplicable para el pago de la línea de crédito debe ser claro y… no puede conllevar un agravamiento desproporcionado del monto adeudado para el titular.”

(“The payment-allocation order applicable to the credit line must be clear and… cannot result in a disproportionate worsening of the amount owed by the cardholder.”)

In practice, the regulation sets an order: your payment must first cover the period’s minimum payment. If you paid more than the minimum, the excess is applied first to the installment debt with the highest interest rate, moving toward the lowest, and only afterward to revolving-debt balances. This order is expressly designed so that you don’t end up paying more interest than your own payment should be reducing.

Your credit line can’t go up without your authorization

A credit line increase isn’t an “upgrade” the bank can switch on unprompted. Article 30 of the Transparency Regulation states it bluntly:

“Los incrementos de la línea de crédito no podrán efectuarse a través de modificaciones unilaterales por parte de las empresas… deberá requerirse el consentimiento expreso del cliente en cada oportunidad en que este se realice… No podrá considerarse el silencio del cliente como señal de aceptación.”

(“Credit line increases may not be made through unilateral changes by the companies… the client’s express consent must be required each time this occurs… The client’s silence may not be considered a sign of acceptance.”)

This is different from other contractual changes, where it’s enough for the bank to give you 45 days’ notice and you don’t object. To raise your credit line specifically, the bank needs your express consent every single time — never your silence, never the mere absence of an objection on your part.

You have the right to prepay without being charged for it

A right many people don’t know about: Article 22 of Resolución SBS 8181-2012 recognizes your right to pay above the period’s required installment, with no conditions or limits, and without the bank charging you any fee, expense or penalty for exercising it. If you pay more than two installments at once, it counts as “prepayment” and must reduce the principal, with a corresponding reduction in future interest — it isn’t just a bookkeeping adjustment.

Over-indebtedness: what exists, and what doesn’t yet exist, under Peruvian law

Peru doesn’t have a specific “over-indebtedness” law that gives an indebted individual a direct right — to demand a forced restructuring, for example. What does exist is a prudential obligation placed on the banks themselves: Resolución SBS N.° 6941-2008 (Regulation for Managing Retail Debtors’ Over-Indebtedness Risk) requires financial institutions to identify and internally manage the risk that their customers — including revolving credit card debt — become over-indebted, as part of the bank’s own risk management.

It’s a rule aimed at the bank, not a right you can invoke directly to renegotiate your debt. What you can use as a consumer are the concrete protections covered on this page — the mandatory TCEA, the cap on the interest rate, the ban on late-payment penalties, the payment-allocation order and the express-consent requirement for credit line increases — together with the Consumer Protection Code, which remains the general route for filing a complaint with INDECOPI when a financial institution acts abusively.

Foreigners

These rules apply equally to anyone holding a credit card or a consumer loan issued by an entity in Peru’s financial system, whether Peruvian or foreign. The TCEA, the legal maximum rate, the late-payment rules, the payment-allocation order and the express-consent requirement for credit line increases don’t distinguish by nationality or immigration status — they apply simply because you contracted with a bank or finance company operating in Peru.