Credit card companies are clamping down
on customers that use their cards to bet on online gambling
sites. A number of card issuers are changing their terms
and conditions so that money placed in an online betting
account from a credit card will be treated as cash advance
and incur a higher rate of interest.
They will also be charged a 2% handling fee for cash
advances, which starts at £2. The interest charged
on cash advances is usually much higher than normal card
purchases. For example, Mint charges 14.9% APR on a normal
card purchase, but 17.9% for cash advances.
Online gambling has proliferated over the past three
years and many gambling sites are challenging the traditional
High Street bookies. Punters enjoy the ease and anonymity
of betting at home, and online sites also typically offer
better odds.
Royal Bank of Scotland is introducing the change from
May 1 for its 11m customers. A spokeswoman said: 'The
gambling transactions are to be treated as advances as
this is felt to be a more accurate means of reflecting
that a gambling transaction is effectively a cash equivalent
exchange.'
Egg, which has 3m customers, will introduce its own change
from April 1. Spokesman Mark Maguire said: 'Essentially,
using your card for gambling is quasi cash and we are
changing our rules to reflect that. Basically, you are
using your card to buy currency.'
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