HSBC To Raise Credit Card Fees For Betting Transactions
HSBC are the latest large UK bank to increase charges on its credit cards when used for gambling transactions.
HSBC credit card customers will see any gambling transactions being levied with a cash advance interest rate rather than a purchase rate. The change on charges applied to gambling transactions will come into effect on February 1st.
HSBC’s change in policy will result in gambling transaction being subjected to interest charged at a rate between 21.9% and 27.8%. Purchases are charged at a lower rate of between 15.9% and 22.9%.
A spokeswoman for HSBC said: “ This one of a number of changes we have made to our credit card offering recently to bring us in line with the competition.”
Currently in the UK credit card market there is standard policy for charges made on gambling transactions on credit cards. Barclaycard and Lloyds, for example, charge for gambling transactions at their lower purchasing interest rates.
However, MBNA, RBS/NatWest and Egg are three UK credit card firms who charge for these transactions at the interest rates used for cash advances.
Despite increasing scrutiny from UK watchdogs regarding credit card customers accruing debt, especially through online gambling, HSBC deny that customers using their credit cards to gamble will build large debts on which they will later default.
“ We have not seen that as part of our customers’ behaviour,” added the HSBC spokeswoman.
The bank’s decision to increase their charges on credit cards for gambling will affect transactions made via the internet and telephone, covering online poker, internet bookmakers and betting exchanges.
One way HSBC customers can avoid being charged at the higher interest rate may be to channel payments through PayPal, as their credit cards will be charged at the lower purchasing rates.
Alisdair Milton
2nd January 2007
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