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What you need to know about credit card gambling

You can use a credit card for gambling in Canada—but it'll cost you.

In Canada, you can use credit cards for gambling. But each transaction will likely count as a cash advance on your credit card, which comes with a fee.

Many online casinos accept credit cards. If you go to a casino in person, you’ll have to withdraw funds from your card at an ATM. You might be able to purchase lottery cards with a credit card, depending on whether your retailer allows it. Many do not.

How credit card issuers classify gambling transactions

Gambling is typically categorized on your credit card account as a cash advance. This is because gambling charges are often “cash equivalents” or “cash substitutes” (i.e. where you spend money to get another form of money).

Although fees and policies vary between cards, cash advances are almost always bad news. There are four main reasons for this:

  • Cash advances are expensive. Canadian card issuers often charge higher interest for advanced funds, say, 22% as opposed to 19.99% for regular purchases. Cash advances also usually come with a percentage or flat fee per transaction, often around 1% to 3%.
  • Interest applies from the day you advance funds from your card. Credit card providers are federally required to offer a minimum 21-day grace period in which you can pay off your balance with 0% interest. However, this doesn’t apply to cash advances.
  • Cash advances are usually exempt from rewards. As you might expect, you can’t earn cash back, rewards points, or travel miles on cash advances. Plus, cash advances might not count towards minimum spending requirements for special rewards or bonus offers.
  • Cash advances appear in your credit history. Taking out a cash advance won’t directly hurt your credit score. But it will show up on your credit report as part of your overall debt load, which can impact your score.

Using credit cards at casinos and gambling establishments

Did you know that non-gambling credit card purchases at casinos or other gambling establishments could be recognized as cash advances. This means you could be charged a higher interest rate and cash advance fees, even though you didn’t advance cash from your card.

This can happen because the establishment’s merchant category code is preset to process gambling transactions. So, when the charge goes through to your credit card company, it may be processed as a gambling transaction or cash advance.

If you’re planning to use your credit card for dinner, drinks or anything else at a venue that allows gambling, call your credit card company to confirm if your spending is considered a purchase or cash advance. Keep your receipts! If you’ve been wrongfully charged for a cash advance, contact your card provider to explain the situation.

Example: How much could credit card gambling cost?

Let’s say you decide place a $1,000 bet at a sports event and pay with your credit card. Your card has a 3% cash advance fee and a cash advance APR of 25%.

Your cash advance fee would be $30. If you make $25 payments monthly, it’ll take 7 years and 3 months to pay off the balance, and the total interest charge would be $1,172.43. If you make $100 payments monthly, it’ll take 1 year to pay off the balance, and the total interest would be $133.22.

Bottom line

Credit card gambling transactions will probably be classified as cash advances, which typically come with a high interest rates and fees.

Before gambling with a credit card, make sure you know how transactions will be classified. Let your card provider know if you plan to make non-gambling transactions at a casino or other gambling establishment to avoid being mischarged for cash advances.

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