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Using a credit card for gambling

You may be able to use a card for gambling — but it'll cost you.

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Kliment Dukovski
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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.

Credit card companies that charge the cash advance rate for gambling transactions

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.

Using a credit card at gambling establishments

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.

What should I think about before using a credit card for gambling?

Make sure you consider 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 APR. This rate can be as high as 29%.
  • Cash advance fee.
    In addition to the interest charges, you will be charged a cash advance fee, typically worth between 3% and 5% of the transaction. This means it would cost you between $15 and $25 for a $500 bet.
  • No grace period.
    Cash advances are not eligible for the standard grace period of up to 25 days on your card, meaning interest begins accruing immediately when you make a gambling transaction.
  • No rewards.
    ATM cash withdrawals and gambling purchases are usually not eligible to earn credit card rewards points.
  • Promotional offers.
    Credit cards that offer bonus points for new customers will likely exclude gambling purchases from the list of eligible transactions required to take advantage of those deals

Example: How much could a gambling transaction on my credit card cost?

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.

Use our repayment calculator to help you figure out how much you could pay in your situation.

Bottom line

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.

Images: Getty Images

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