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RECENTLY many credit card companies have re-classified gambling transactions from standard purchases to cash transactions – and as such, using your credit card for gambling often incurs higher rates of interest, no interest free periods and handling fees.
Cash transactions...
Since financial regulators in the UK decided to put a ceiling limit on penalty fees credit card companies have been finding various ways to try and recoup lost profits.
One of these ways has been to widen the number of transactions that are construed as cash transactions, which carry a higher interest rate and handling fees. Some of the transactions that now come under the umbrella of cash transactions are:
- Gambling – including any transaction at a gambling establishment, e.g. food and drink.
- Gift cards and gift vouchers
- Financial transactions such as bill payments
Avoiding the fees that come with gambling
Gambling can be an expensive habit at the best of times, but when you use your credit card to conduct gambling transactions it can work out to be even more costly.
This is because gambling transactions are now construed as cash transactions by those credit card companies that still allow the cards to be used for this type of transaction – many credit card companies have blamed online gambling for the high levels of bad debt that are currently facing the UK, and for this reason some have placed a ban on their cards being used for such transactions.
Those credit card companies that do allow the cards to be used for online gambling certainly make sure that the customer pays for it.
Not only do customers have to pay extortionate interest rates on this sort of transaction, but there are also cash transaction fees to be added on and these can be quite sizeable. For regular gamblers the fees can soon start to add up, amounting to a small fortune over time.
Online gambling sites now offer a range of ways to make payments, and in order to avoid the costly cash transaction charges that come with online gambling it is worth looking at these other payment options – for instance, using your debit card to make payment for gambling transactions means that you won’t have to worry about additional charges and interest.
For those determined to use a credit card for their online gambling transactions it is a good idea to compare a range of cards and find one that offers lower rates of interest and more competitive charges on cash transactions, which could help you to keep the costs down as much as possible.
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