Credit card crunch for online gamblers; PERSONAL.
Most credit card providers now treat online gambling transactions as cash advances - which usually attract a higher rate of interest than purchases, according to price comparison site Moneynet.co.uk.
And while most cards offer up to 56 days' interest free on purchases, there is no such leeway on gambling transactions, meaning that punters incur interest from day one.
"Unless gamblers are aware that these transactions are treated differently from normal everyday purchases, they will be losing money hand over fist as the top rate of interest stacks up," said Richard Brown, chief executive of Moneynet.co.uk.
NatWest charges an interest rate of 12.9 per cent on purchases on its classic credit card - but that soars to almost double, 24.94 per cent, on cash withdrawals.
First Direct charges 17.9 per cent on purchases and 21.9 per cent on cash.
Nationwide not only charges more interest on cash as opposed to purchases on its gold credit card - 22.9 per cent against 15.9 per cent - it also levies its cash withdrawal handling charge (the higher of 2.5 per cent of the sum or pounds 3) on online gambling transactions.
The Co-op charges a flat interest rate of 11.9 per cent but hits online gamblers with its cash withdrawal charge, which is the same as the Nationwide's.
The cost can soon mount up: an online gambler racking up pounds 5,000-worth of debt on a credit card at a 22 per cent cash advance rate will repay at least pounds 1,100 per year in interest unless they clear the debt.
"In other words, the gambler will need to win their stake back plus at least 22 per cent just to stand still," said Mr Brown.
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|Publication:||The Birmingham Post (England)|
|Date:||Feb 2, 2008|
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