Use online gambling sites? Why you could still lose money on a winning bet

Posted in 'Personal Finance' by Barry Stamp

28 August 2008

Despite the Bank of England cutting interest rates three times in a row, the APR on credit cards hasn’t followed suit, and in the wake of falling profits and concerns over bad debt, many have even increased by a couple of percentage points.

In terms of damage to your wallet however, it’s the less high-profile changes that might have most impact. The ones that are contained within the small print. Though these are routinely advised to us by letter, all too many of us simply don’t have the time or inclination to read them.

One of our customers has recently pointed out to us a great example. Wedged between – frankly rather dull – bullet points dealing with definitions and dates, it would be easy to miss the clause that deals with how much you pay if you use your credit card on online gambling sites.

Egg now defines gambling transactions – for example, topping up your balance on any online bookies – as a Cash Advance.

What this means is that rather than paying the typical APR on purchases, currently 16.9% with Egg – (or indeed nothing at all if you pay your Egg card bill in full every month) - you’ll be charged the cash rate of 24.9%, as well as a 3% cash advance fee (minimum £3).

The simple message here is that if you do plan to use an online gambling site, don’t use your credit card to top up your balance – a debit card will probably be miles cheaper.

Foreign transactions have also been hit by increased rates, with Egg increasing their fee for converting to sterling to 2.75% - again on top of the other charges that apply.

Our advice to customers in the wake of these recent changes is to check your recent credit card bills for any unexpected charges. If you find some, there’s every chance you could get a better deal by switching to a new card.

If you have any similar stories of sneaky tactics being used by lenders, we’d love to hear from you so that we can warn other checkmyfile customers. Feel free to email us, or vent your full frustration by completing our 2008 Banking and Credit Card Survey – which takes only a few minutes to complete and can give you the chance of winning either a new 3G iPhone on O2 Pay & Go or a Sony 32" flat screen TV.