Example: How much could a gambling transaction cost on my credit card?
Suppose your credit card issuer and the betting merchant accept gambling transactions. So you decide to place a total of $1,000 worth of bets on a sporting event. On a credit card with a 3% cash advance fee and a cash advance APR of 28%, here’s what could potentially happen:
- If you pay the minimum amount each month.
If your card balance was $0 before the gambling transaction, and this remains the only transaction on the card, you would pay $1,982 in total over five years and five months.
- If you pay the full amount after 30 days.
Assuming this is the only transaction on your card, you would pay $23.33 in interest, plus $30 for the cash advance fee. This is on top of the original $1,000, bringing the total you’ll pay off the card to $1,053.33.
- You pay the total amount later that day.
You would have to pay $0.07 in interest, plus $30 for the cash advance fee on top of your $1,000 bet. This means it would cost $1,030.07 in total.