A question of cash

**jetset** · 29th October 2007, 11:15 PM

WHY SHOULD C-CARD CLIENTS PAY CASH TRANSFER FEE FOR GAMBLING?

Brit punter raises a valid question

The Telegraph's adviser Liz Dolan was asked an interesting question by a Brit online gambler this week - "Why are credit card gambling transactions being classified as cash transfers and charged a cash transfer fee?"

The gambler wrote that he uses his credit card for moderate and disciplined online gambling on the Bluesquare.com site, but has noticed that since the beginning of September he has been hammered with cash transfer fees.

"I am not happy about this as I see no difference between using the card for betting and using it to for, say, buying a book through Amazon," the dismayed punter wrote. "There will be a lot of unhappy punters this month who will not only be counting their betting losses but also paying extra to the Co-op for the privilege."

Ms. Nolan looked into the issue and came back with an explanation:

"The Co-op says its decision to re-categorise credit card spending on "lottery tickets, betting, gambling or wagering" is in line with practice at most other banks and is intended as a "deterrent for bad debt" she explained.

"In other words, you are being penalised for using your credit card in this way. I�m on your side here. The banks' job is to ensure we can afford to repay what we borrow, not to tell us what we can spend the money on.

"Cash transfers are automatically subject to charges from the date they are made, whereas cash purchases normally benefit from interest-free periods and cost nothing if the balance is repaid each month � so this high moral stance is also a useful money spinner for the banks.

"According to Sandra Quinn of Apacs, the Association of Payment Clearing Services, online gambling with credit cards is on the increase. But gambling with debit cards is growing even faster, and more gamblers use debit cards than credit cards.

"Gambling debts used not to be legally recoverable, but all that changed on September 1 when the new Gambling Act came into force. It�s hard not to believe this change has concentrated the minds of the banks."

**suzecat** · 30th October 2007, 01:34 AM

My opinion probably will not be very popular and I understand why banks charge gambling transactions as cash advances. It is possible to make money from gambling (I sure hope so!

) Notwithstanding the fees that are generated for the banks, the alternative is free cash loans (not likely).

**EasyRhino** · 30th October 2007, 11:42 PM

Plus, if you make a buy in at a casino, then withdraw via some other means, you've effectively turned your credit limit into cash. I.e. a cash advance.

Not that I would ever recommend to ANYONE that they use their credit card if it will get counted as a cash advance. Those interest rates are almost as bad as the house's advantage!

**vinylweatherman** · 31st October 2007, 04:12 AM

Barclaycard

They haven't succumbed to this trickery yet, although most others have.

First Direct seems to have a bug, and despite having this in the T & C, does not seem to register my deposits as a cash advance.

Royal Bank of Scotland cards - no such luck. All went this route, and after a delay due to a bug, now charge interest on gambling transactions from day one.
Quite a few cards STILL treat gambling transactions as a "cash advance", but have a special term waiving the 2% to 3% fee.

I have already pointded out thechange in the recoverability of Gambling debts to a UK player that was seemingly screwed over by Absolute Poker. "Gambling debt" includes WINNINGS, whether these are made by the punter OR the casino!!!!
There is yet to be a test case brought for recovery of winnings through a credit card deposit (must be over �100) under the consumer credit act coupled with the new gambling act - any volunteers

Casinos that void winnings for UK credit card players had better have a watertight case, not just someone's "gut feeling/opinion" as sometimes seems the case. If it goes to court, the secrecy surrounding such actions will be brought out and held accountable before a county court judge (unless very large winnings are involved). Since the issuing bank will have to fork out if the plaintiff wins (and the casino refuses to pay), it could endanger the ability of casinos to continue to accept credit card deposits.