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By Julia Kukiewicz
Editor
20 November 2009
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 I know that it's normally expensive to withdraw cash with a credit card but I think I've seen a way around it that will allow me to withdraw some cash for free.
Both my credit card and a debit card are registered with a gambling website so I could use my credit card to deposit some money into the paying account and then pay it back out onto my debit card and withdraw the cash from an ATM - can you tell me whether this will work? I really need the cash! 
Anon, Cambridge
Most credit cards classify gambling transactions as cash advances so in most instances there's no benefit in transferring the amount to your gambling account rather than just getting the cash out at an ATM.
However, some credit cards don't charge a handling fee on gambling transactions, although they do charge the same cash interest rate, so you could save a small amount of money there. However, you'll need to check your credit card terms and conditions carefully to see if that's true of your credit card.
As well as gambling transactions, credit card providers will apply cash withdrawal charges to any other methods you could use to covert your credit to cash such as buying foreign currency and wire transfer money orders through third-parties such as PayPal.
Apart from that, the gambling website might take a dim view of you using their account just to transfer money in and out so it would be worth checking with them too before you take action.
In fact, one of the gambling websites we checked (888.com) requires that the money you pay in on a credit card would have to be paid out onto the same credit card.
I can see why you would want to try and get round withdrawing cash with your credit card, though. It's an expensive business: you'll be charged a high rate of interest from the moment you withdraw the cash or make the transaction (unlike purchases which always have an interest-free period) and in addition you'll be charged a handling fee of 2-3% of the amount you're withdrawing.
However, the same high interest rate from the date of the transaction will still apply with a gambling transaction, even if your card provider allows you to avoid the cash handling fee.
Even if you can avoid the cash handling fee, this can add up very quickly. For example, say you withdraw £500 with a Virgin Credit Card from an ATM and pay it back in one month. You'll be charged a 3% handling fee - so £15 - plus a month's worth of interest with an annual percentage rate of 27.9% so approximately £10.38: £26.65 altogether.
All in all, I'd strongly advise against this via-gambling method of quick cash withdrawal: not only is it a high interest rate risk but the convoluted terms and conditions of the gambling websites make it an even bigger liability.
Unfortunately, there is no way for you to get around paying cash withdrawal fees when you use a credit card in the future. You can use a debit card, which will be free, or a Pre-Paid card which will charge one low flat fee (usually under £1) but neither of these will actually let you borrow money (except a debit card overdraft).
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