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Credit cards are convenient, but if you want to pay for lotto tickets, buy casino chips or play poker online, you’ll find it impossible to do. In most cases, you’ll be asked to visit an ATM nearby and make a cash withdrawal or try different payment methods.
However, some credit card providers may allow for such transactions, but they will categorize them as cash advances, which is the same as a cash withdrawal.
If your credit card allows you to make gambling transactions, the charge will typically be categorized as a cash advance. This is because gambling charges are considered cash equivalents where you spend money to get another form of money.
These transactions attract a cash advance fee between 3% and 5% and a high cash advance APR. Cash advances are also commonly exempt from any grace period, which means you’ll be charged interest on gambling transactions from the day they’re made.
If you’re at a gambling establishment, using your credit card for non-gambling activities — such as buying drinks or meals — could also attract the cash advance fee and interest rate. When this happens, it’s 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 will most likely 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 first and ask them if your spending would be considered a purchase or a cash advance. Alternatively, get a receipt for your spending and – if you think it is wrongly processed as a cash advance – contact your issuer and explain the transactions were not for gambling.
Make sure you consider these factors before using your credit card for gambling transactions:
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:
Use our repayment calculator to help you figure out how much you could pay in your situation.
If you succeed in making a gambling charge with your credit card, know that it will likely pass as a cash advance. This comes with a high cash advance APR and cash advance fee, which makes using a card to gamble not a wise choice.
However, if used properly for other kinds of purchases, a credit card can be an excellent tool. Compare your credit card options to find one that might fit your needs.
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