Know exactly what it will cost you when you use your credit card for a gambling transaction.
Credit cards can seem like a convenient and safe option when you want to place a bet on the Melbourne Cup, pay for scratchies and lotto tickets or play poker online, but it comes at a cost. Most credit card providers categorise gambling transactions differently to everyday purchases and charge high fees for them, while some don’t even let you use your card to gamble.
This page will explain everything you need to know about using your credit card for gambling transactions, the charges these payments typically incur and card providers that won’t allow them. We also look at other factors and alternatives to consider.
Credit card companies that charge the cash advance rate for gambling transactions
Card providers typically categorise gambling transactions as cash advances because they are often “cash equivalents” or “cash substitutes” (ie. where you spend money to get another form of money). These transactions attract a high cash advance fee and the cash advance interest rate. Cash advances are also commonly exempt from any interest-free period, which means interest starts accruing on your gambling transaction from the day it takes place.
Using a credit card at gambling establishmentsUsing your credit card for non-gambling activities at a gambling establishment can also incur the cash advance fee and interest rate. This is because the establishment’s merchant code has often been preset to process gambling transactions, so your credit card company will most likely also process your dinner at the casino as a gambling transaction or cash advance.
|Bank provider||Are gambling transactions charged at the cash advance rate?|
|American Express||Gambling transactions are prohibited|
|ANZ||Cash advance rate|
|Bankwest||Cash advance rate|
|Bank of Melbourne||Cash advance rate|
|Bank of Queensland||Gambling transactions are prohibited|
|CommBank||Cash advance rate|
|Citi||Gambling transactions are prohibited|
|CUA||Cash advance rate, but online binary betting is prohibited|
|HSBC||Cash advance rate|
|NAB||Cash advance rate|
|St.George||Cash advance rate|
|Suncorp Bank||Gambling transactions are prohibited|
|Virgin Money||Gambling transactions are prohibited|
|Westpac||Cash advance rate|
Which credit cards don’t allow you to make gambling transactions?
Looking at the table above, you can see that some credit card providers don't allow the use of their credit cards for gambling transactions. American Express, Bank of Queensland, Citi, Suncorp Bank and Virgin Money all prohibit the use of credit cards for gambling transactions. The same goes for charge cards from Diners Club, which also prohibits gambling transactions.
Keep this in mind when considering which credit card to use for a gambling payment so that you can avoid issues such as declined transactions. When in doubt, you should always contact your provider directly if your gambling transaction has been declined or if you’re unsure whether you’re making an accepted purchase.
Factors to consider when using a credit card for gambling
Make sure you think about these factors before using your credit card for gambling transactions:
- Interest rate. The cash advance interest rates on most credit cards are usually much higher than your regular purchase transaction rates. This rate can reach as high as 29.49% (at the time of writing).
- Cash advance fee. In addition to the interest charges, you will be charged a cash advance fee, which can be the greater of either a percentage of the transaction amount or a minimum fee. The cash advance fee is usually 3-4%, which means you can expect to pay $15 to $20 in fees for a $500 sporting bet.
- No interest-free days. Cash advances are not eligible for the standard interest-free period on your card. This means that interest begins accruing immediately when you make a gambling transaction. Also note that interest-free periods are halted when you have an outstanding balance transfer.
- Rewards. As with cash withdrawals from an ATM, travellers’ cheque purchases and other similar cash advance transactions, you will not usually be able to earn credit card rewards points for gambling transactions.
- Promotional offers. Credit cards that intermittently offer 0% interest or bonus points for new customers may exclude gambling purchases from the list of “eligible transactions” required to take advantage of those deals.
Tom uses his credit card to place a bet on a tennis match.
Tom enjoys watching tennis, and part of that pleasure comes from betting on the live tennis matches that he watches. Tom discovers the ease of making bets on TAB online one day, and places several bets on the month’s upcoming matches. He bets a total of $2,000 on four games and, without thinking twice, uses his credit card to pay. His card charges a 3% cash advance fee and a cash advance rate of 21.99% p.a. Here’s what could potentially happen:
- Tom pays the minimum amount each month
Assuming his card balance was $0 prior to that transaction and this remains the only transaction on his card, Tom will pay $5,735 in total over 16 years and nine months.
- Tom pays the full amount after 30 days
Assuming again that this is the only transaction on his card, Tom will have to pay $36.15 for interest (21.99% X $2,000 X 30/365), plus $60 for the cash advance fee (3% of $2,000) on top of his $2,000 principle, which will be $2,096.15 in total.
- Tom pays the total amount later that day
Assuming that this is the only transaction on his card, Tom will have to pay $1.20 in interest (21.99% X $2,000 X 1/365), plus $60 for the cash advance fee (3% of $2,000) on top of his $2,000 principle, which will be $2,061.20 in total.
How you pay off your gambling debts will depend on whether your account was opened before the July 2012 credit card reform or after. If it was before, providers could stipulate that repayments are made on outstanding items in designated order, meaning that the most recent gambling transaction will be paid off last.
If the account was opened after July 2012, then Tom’s repayments would go to the debt that was accruing the highest amount of interest first. Considering that gambling transactions are usually considered cash advances and therefore accrue more interest, it’s likely that the repayments would go there first.
It’s important to remember this and to know how your repayments are allocated if you want to get your debt under control.
Now that you’re aware of the fees that a gambling transaction could incur on your credit card, it may be wise to consider some alternatives. There are fee-free ways to pay for your wagers, such as debit cards, prepaid cards or cash. If you’d still rather use a credit card, check out these low cash advance rate cards. You could also research and explore workaround E-wallet solutions like Skrill and Neteller, or PayPal, although PayPal has its own stringent rules around gambling transactions and prohibits many forms of them altogether. Whatever you decide, always remember to gamble responsibly.Back to top