U.K. Credit Card Holders Being Charged Higher Rates for Online Gambling
The U.K. credit card provider HSBC has joined a number of other banks that are charging customers higher rates for gambling transactions it processes."This is one of a number of changes we have made to our credit card offering recently to bring us in line with the competition," a spokeswoman for the firm told journalists.
NatWest, MBNA
Rival banks MBNA and Natwest already charge customers using their credit cards to make gambling transactions at higher cash advance rates, but other banks, like Barclaycard and Lloyds continue to charge at lower rates.Credit card use is illegal for both casino and bookmaker gambling in the U.K. -- but legal for Internet casino usage.
HSBC said that the move isn't designed to dissuade gamblers from piling up debt and defaulting on credit card payments: "We have not seen that as part of our customers' behavior," the spokeswoman said.
According to the London-based financial analytics firm Apacs, spending on online gambling accounted for just 0.8 percent of all credit cards spending last year through June.
Lots of Cards
The higher rates may give U.K. gamers the incentive to switch credit cards. One in seventeen U.K. adults carries five or more credit cards, according to research from MoneyExpert.com.About eight percent of men own five or more cards, while only four percent of women have that many cards.
But, about a third of consumers own three or more cards, with Londoners relying on them more than their compatriots – as many as 28 percent in the capital hold three or more cards.
"People are kidding themselves if they rely on moving from one card to another just to avoid repaying their debt," said Sean Gardner, the CEO of MoneyExpert.com.
Anxieties about credit card debt have accumulated over the past year and tend to peak at Christmas time when spending on socializing is high.
"Credit cards are becoming our biggest Achilles heel," Gardner said.
Debt figures reported by Credit Action, a non-profit group, at the start of December, demonstrated that Britain's personal debt is increasing by £1 million every four minutes.
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