Gambling Bank Charges
Gamblers are forced to pay higher charges as Britain’s biggest banks introduce new rules to penalise gaming enthusiasts. Those clever bankers have declared that in using your credit card for gambling transactions you are effectively getting a cash advance. Therefore those banks are planning to increase the interest to be paid and the charges in line with that of other cash advance transactions…cunning.
Britain’s biggest banks, including The Royal Bank of Scotland and online credit card company egg have made crucial new changes to the way that they define “gambling transactions”. These new rules mean that anybody using their credit card to gamble on the internet will be charged a higher rate of interest than the norm and sometimes will be charged an additional fee.
Last year a staggering £53 million in the UK was spent on gambling including the national lottery and one million people in the UK regularly gamble online at one of the 1,700 estimated online gambling sites.
A spokeswoman from Mint, part of the Royal Bank of Scotland group said, “The step that has been taken by the RBS is part of a move taking place across the credit card industry to examine the type of transactions people are making on their accounts. 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.” The more cynical amongst us, including those here at Jackpot.co.uk may feel that this is merely a ploy by the banks to make even more money out of the UK’s punters.
As it stands most credit card companies regard gambling transactions as purchases. Therefore a low rate of interest is applied and no fees attached. Cash advances, such as the withdrawal of money from a cash machines using a credit card are subject to higher rates of interest plus a handling fee of two to three per cent.
Citibank already prohibit their UK members from using their credit cards to gamble online. Under the announced changes RBS Mint card customers using their credit cards for gambling will be charged 17.9 per cent, up from just 14.9. Egg customers who choose to gamble with their credit cards will be charged a 2.5 percent fee and a cash advance interest rate of 15.9 per cent. MBNA which currently has a whopping 7 million members already charges a 2 per cent fee and 21.9 per cent interest on gambling transactions, many other banks are ready to follow suit when the changes come into action on April 1st (lets hope it’s an April fools joke!).
A spokesman for egg which is part of the Prudential said, “The recent explosive growth of online gambling and gambling in casinos has meant that consumers now demand different ways of funding this type of leisure activity. As such many credit card providers now allow customers to use their cards to advance cash for gambling, typically in the form of chips or ‘virtual’ chips. Our decision to levy a fee on such transactions is simply bringing gambling into line with traditional forms of cash advances, such as obtaining money from an ATM machine or the purchase of foreign money, traveller’s cheques or postal orders.”
Industry leaders widely expect charges for gambling transactions on credit cards to be common by the end of the year.
Editor, Jackpot.co.uk - 2006-09-29 13:24:02