Credit card providers treat a surprisingly wide range of transactions a cash withdrawal, including gambling activity. So is your credit card transaction actually a cash withdrawal?
According to moneysupermarket.com, many credit card transactions are treated as a cash withdrawal, oftend including foreign currency, electronic money transfers, postal orders and the purchase of travellers’ cheques.
Gambling is one key area where consumers may be caught out, finding that they are charged around 11% more than the advertised APR when using their credit card as cash.
Kevin Mountford, head of banking at moneysupermarket.com, said “The growth of online gambling makes it more likely that people will use their credit cards when placing a bet. Our analysis show this might narrow your odds significantly, as the cost of using a credit card for online gambling can almost double the standard APR you are charged elsewhere.
In addition to this any form of money transfer or travel money purchase will be charged on your credit card in the same way as a cash withdrawal. Credit card users should be careful to ensure they don’t expose themselves to higher charges by knowing exactly when and where their credit card transactions will be more expensive.”
Different credit card providers have different definitions of a cash transaction, for example
Egg credit card – obtaining cash, foreign currency, travellers’ cheques, postal orders and gambling transactions using a card or the card number. Get more details on the Egg website.
Virgin credit card – a transaction under which you receive cash or a cash substitute by using your card or card number, including foreign currency, travellers’ cheques, postal order, gambling transactions and any electronic transfers of cash which are not money transfers.
Halifax All in one credit card – Cash advance – cash, traveller’s cheques or foreign currency obtained by using the card or money transfers, finance payments or gambling transactions made with the card. Get more details on the Halifax website.
Many people are turning to prepaid cards as they consider them the way to get the best deal on the travel money. As they become increasingly popular, prepaid currency cards are being offered by more and more providers, such as FairFX, Caxton FX and RationalFX.
If you are making a foreign currency transaction, such as paying bills, emigrating or buying an overseas property, or any other reason, an option is to use a company that deals directly with the currency markets. One such company is TorFX who MoneyHighStreet work closely with. They offer highly competitive exchange rates on all major currencies, often beating the bank’s rates by over 3%. Get more details on the TorFX website.