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Using a credit card for gambling

Make sure you know what it will cost when you use your credit card for gambling transactions.

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Alison Loveder
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Credit cards are convenient, but if you want to place a bet on the Melbourne Cup, pay for lotto tickets or play poker online, they are usually an expensive choice. Most credit card providers classify gambling transactions differently from everyday purchases and charge high rates (up to 27.50% p.a.) and fees for them. Others don’t let you use your card to gamble at all.

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

Card providers typically categorise gambling transactions as cash advances because they are often “cash equivalents” or “cash substitutes” (i.e. you spend money to get another form of money).

These transactions attract cash advance fees and a higher cash advance interest rate. Also, cash advances are typically exempt from an interest-free period, which means interest starts to accrue on your gambling transaction the day it takes place. In this table, you can discover which providers allow gambling transactions and the range of cash advance interest rates for personal credit cards.

Bank providerGambling TransactionsCash Advance Rate (varies by card)
American ExpressProhibitedN/A
ANZCash advance rate19.95%
BNZCash advance rate18.95% to 22.95%
Gem VisaCash advance rate25.95%
KiwibankCash advance rate9.95% to 22.95%
The WarehouseCash advance rate22.95%
WestpacCash advance rate22.95%

Using a credit card at gambling establishments

Using your credit card for non-gambling activities at a gambling establishment may also incur the cash advance fee and interest rate because an establishment’s merchant code is often preset to process gambling transactions. Therefore, your credit card company most likely processes your dinner at the casino as a gambling transaction or cash advance.

Factors to consider when using a credit card for gambling

Make sure you contemplate these factors before using your credit card for gambling transactions:

  • Interest rate. The cash advance interest rate on most credit cards is usually much higher than your regular purchase transaction rate. This rate can reach as high as 27.50% (at the time of writing).
  • Cash advance fee. In addition to the interest charge, your provider charges a cash advance fee, which is the greater of either a percentage of the transaction amount or a minimum fee. The cash advance fee is usually 3% to 4%, which means you can expect to pay $15 to $20 in fees for a $500 sporting bet.
  • No interest-free days. Cash advances are not eligible for the standard interest-free period on your card, which means interest starts to accrue as soon as you make a gambling transaction.
  • Rewards. As with cash withdrawals from an ATM, traveller’s cheques and other similar cash equivalent transactions, you usually can’t earn credit card reward points for gambling transactions.

Example: Tom uses his credit card to place a bet on a tennis match.

Tom enjoys watching tennis, and part of that pleasure comes from betting on the live tennis matches he watches. Tom discovers the ease of making bets using TAB online one day and places several bets on the month's upcoming matches. He bets a total of $2,000 on 4 games and, without thinking twice, uses his credit card to pay. His card charges a 3% cash advance fee and a cash advance rate of 21.99% p.a. Here's what could potentially happen:

  • Tom pays the minimum amount each month

Assuming his card balance was $0 before that transaction and this remains the only transaction on his card, Tom will pay $5,735 in total over 16 years and 9 months.

  • Tom pays the full amount after 30 days

Assuming again that this is the only transaction on his card, Tom has to pay $36.15 for interest (21.99% x $2,000 x 30/365), plus $60 for the cash advance fee (3% of $2,000). This is on top of the $2,000 principle, which means he pays $2,096.15 in total.

  • Tom pays the total amount later that day

Assuming this is the only transaction on his card, Tom has to pay $1.20 in interest (21.99% x $2,000 x 1/365), plus $60 for the cash advance fee (3% of $2,000) on top of his $2,000 principle, which is $2,061.20 in total.

* This is a fictional, but realistic, example.

Now you’re aware of the fees you may incur if you use your credit card for gambling transactions, it may be wise to consider alternatives. There are fee-free ways to pay for your wagers, such as debit cards, prepaid cards or cash. You can also research and explore ewallet solutions like Skrill, Neteller and PayPal. However, PayPal has stringent rules around gambling transactions and prohibits many forms altogether. Whatever you decide, always remember to gamble responsibly.

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