What charges are made for online gambling?

Using a credit card for online gambling will often incur a higher rate of interest than for purchases as most credit cards now class this as a cash transaction.

Gambling transactions are usually charged at the same interest rates as for cash, and they may also be charged a handling fee - an additional one off-charge based as a percentage of the transaction amount.

What counts as gambling?

Credit card providers are strict on the types of purchases they class as gambling transactions, they can include:

• Scratch cards and lottery tickets
• Online poker, bingo or other games of chance online
• Any financial transaction that takes place in a casino, bookies or other gambling establishment. That includes food and drink bought in a gambling establishment.

In short, there's little leeway and no loopholes. In fact, some credit card providers don't allow gambling transactions at all. The credit card purchase would be refused in the cases above with those providers.

Borrowing to gamble

At the very least, using a credit card for gambling adds a significant amount to the bet and eats into any winnings. Much more importantly than that, though, paying high interest rates on borrowing to pay means seriously risking falling into a debt spiral: borrowing more and being able to pay less.

For thousands of gamblers every year, borrowing to keep gambling leads to serious, unmanageable debt problems.

Even contemplating borrowing money to use for gambling could be an indication that you have a gambling problem.

Gamcare is the UK's largest specialist help organisation for those with gambling problems. They offer advice to anyone concerned about their own gambling or that of a friend or family member.

NHS Direct also has a Gambling Addiction page with links to other useful advice organisations.

Those facing any level of debt as a result of gambling should seek help from an independent advice agency. The Citizen's Advice site can help you find the nearest face-to-face advice centre and online help is available too.

Remember, too, that lenders have a responsibility to protect the most vulnerable borrowers.

Cash advance costs

It's worth noting that gambling transactions aren't the only credit card purchases to be classed as cash advance transactions.

Some of the transactions which come under the umbrella of cash transactions include:

• Buying foreign currency
• Buying gift cards and gift vouchers
• Financial transactions such as bill payments

It's common for cash transactions to be charged higher rates of interest than purchases on a credit card, and can be up to 30% p.a.

Cash transactions also incur handling fees. These don't always apply to gambling transactions - however it varies between cards and are becoming more common.

They're rarely included in the standard interest free period - which sets out that if you repay your statement balance in full you won't be charged interest on purchases (most credit cards don't include cash transactions in this).

Effectively, this means that making a gambling transaction would incur interest from the date of the transaction until it was paid back in full - regardless of whether or not the statement balance is fully paid back each month.

Those credit card companies that do allow the cards to be used for online gambling certainly make sure that the customer pays for it.

Not only do customers have to pay extortionate interest rates on this sort of transaction, but there are also cash transaction fees to be added on and these can be quite sizable. For regular gamblers the fees can soon start to add up, amounting to a small fortune over time.

All in all though, gambling with a credit card shouldn't even be a consideration.

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