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. Im 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. Its hard not to believe this change has concentrated the minds of the banks."
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. Im 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. Its hard not to believe this change has concentrated the minds of the banks."
) Notwithstanding the fees that are generated for the banks, the alternative is free cash loans (not likely).
