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9th August 2006
Anyone who uses credit cards for online gambling and at casinos are going to start feeling it in the pocket as new terms and conditions on gambling transactions come into force.
The new gambling classifications...
Many credit card companies are re-classifying gambling transactions under cash withdrawals instead of purchases, with betting and gambling now being considered as effectively a cash equivalent exchange.
The extent of the 'gambling' classification...
It is not just placing a bet with your credit card that may incur these new charges; many credit card companies are considering any transaction that takes place in a gambling establishment (casino) to be a gambling transaction, including buying food and drinks!
One credit card's terms and conditions have been updated to stipulate a gambling transaction as: "...gambling means a transaction that we recognise as having made at an establishment where gambling is carried out, whether or not the purpose of that transaction is for gambling activities."
Why you need to watch out...
Many people are still being caught out by high interest rates and unexpected charges when they use their credit card to buy foreign currency or traveller's cheques, unaware that these transactions are classed as cash withdrawals, and therefore subject to a higher rate of interest and handling fees.
It is therefore very important that if you are going to use your credit card to pay for gambling transactions, including buying anything at a casino, you must read your credit card's terms and conditions so you are fully aware of any charges and the interest rates involved.
The credit card companies who have already implemented the new gambling classification:
- Natwest
- Royal Bank of Scotland
- Halifax
- Egg
Note: This is not an absolute list of the credit card companies who charge higher rates and / or fees for gambling transactions.
The future of credit card gambling...
It has already been mentioned by word-of-mouth that higher rate charges and handling fees for gambling transactions are expected to become commonplace within the year.
The most important thing to do is check the terms and conditions of your credit card to find out how much you will be charged before you use your credit card for gambling.
Remember though, your terms and conditions are likely to change and be updated (although credit card companies should inform you of any changes), so make sure you’re reading a recent copy, or phone your credit card company and ask them directly.
You can always play it safe and play with cash! (Just don't withdraw it on your credit card!)
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