Gambling online with credit cards is expensive
May 22, 2010
Credit card owners are liable to pay 11 per cent higher charges when they use their cards to gamble online, warns an expert.
Sandra Quinn, director of communications at the UK Card Association, said customers expose themselves to high APR charges when they decide to use their credit cards at online gambling sites.
Gambling is usually treated by credit card companies as cash withdrawals which can incur high rates of APR, according to moneysupermarket.com.
Moreover, a lot of card issuers have a low tolerance policy to gambling and actively seek to make it difficult for customers to use their cards for such recreational activities.
Ms Quinn said: "There are some credit card companies in the UK who do not allow you to gamble with them."
She attributed the fact that clients were at the receiving end of high charges owing to a lack of knowledge. People were simply not aware of what the real rates were and were caught at the wrong end with sky rocketing card bills.
Another obstacle in protecting customers from such unnecessary charges is the lack of proper monitoring. With most of the gambling websites owned by foreign companies, it makes the process of tracking down individual customer spending difficult and almost impossible to supervise.
Buying foreign currency, traveller’s cheques, ordering postal orders as well as transferring money electronically are also seen by banks and other financial institutions as cash withdrawals incurring a similarly high interest rate.
According to recent data published by the Barclaycard Spending Index, March through April has seen an increase of 0.8 per cent. Also, the results indicated that credit card spending had risen by 8.9 per cent compared to the same time period last year.
The maximum number of dealings was carried out on April 30th, that was the Friday before the May Day bank holiday, that saw 12.7 million transactions being made.
This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.